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MONTANA BOARD OF OIL AND GAS 
CONSERVATION 

OIL AND GAS RULES AND FORMS 

Revised December, 2000 




MONTANA STATE LIBRARY 



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3 0864 0015 6267 



DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION 

CHAPTER 22 
OIL AND GAS CONSERVATION 
Sub-Chapter 1 
Organizational Rule 
Rule 36.22.101 Organizational Rule 

Sub-Chapter 2 
Overall Procedural Rules 
Rule 36.22.201 Procedural Rules 

36.22.202 Environmental Policy Act Procedural Rules 

Sub-Chapter 3 
General Provisions 
Rule 36.22.301 Effective Scope of Rules 

36.22.302 Definitions 

36.22.303 Classification of Wildcat or Exploratory- 
Wells 

36.22.304 Inspection of Record, Properties, and Wells 

36.22.305 Naming of Pools (REPEALED) 

36.22.306 Organization of Reports 
3 6.22.3 07 Adoption of Forms 

36.22.308 Seal of Board (REPEALED) 

36.22.309 Referral of Administrative Decisions 

Sub-Chapter 4 
Board Employees 

Rule 36.22.401 Office and Duties of Petroleum Engineer 

(REPEALED) 



ADMINISTPJiiTIVE RULES OF MONTANA 12/31/00 36-4801 



DEPARTMENT OF NATURAL RESOURCES 
AND CONSERVATION 

Rule 36.22.402 Office and Duties of Administrator (REPEALED) 

36.22.403 Office and Duties of Geologist (REPEALED) 

Sub-Chapter 5 

Seismic Exploration Activities 

Rule 36.22.501 Shot Location Limitations 

36.22.502 Plugging and Abandonment 

36.22.503 Notification 

36.22.504 Identification 

Sub-Chapter 6 
Permit to Drill 
Rule 36.22.601 Notice of Intention and Permit to Drill 

36.22.602 Notice of Intention to Drill and Application 
for Permit to Drill 

36.22.603 Permit Fees 

36.22.604 Permit Issuance - Expiration - Extension 

36.22.605 Transfer of Permits 

36.22.606 Notice and Eligibility Statement for Drilling 
or Recompletion in Unit Operations 

36.22.607 Drilling Permits Pending Special Field Rules 

Sub-Chapter 7 
Well Spacing Units 
Rule 36.22.701 Spacing Units - General (REPEALED) 

36.22.702 Spacing of Wells 

36.22.703 Horizontal Wells 



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36-4802 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



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OIL AND GAS CONSERVATION 

Sub-Chapters 8 and 9 Reserved 

Sub-Chapter 10 

Drilling 

Rule 36.22.1001 Rotary Drilling Procedure 

36.22.1002 Cable Drilling Procedure 

36.22.1003 Vertical Drilling Required Deviation 

36.22.1004 Dual Completion of Wells 

36.22.1005 Drilling Waste Disposal and Surface 
Restoration 

Rules 36.22.1006 through 36.22.1010 reserved 

36.22.1011 Well Completion and Recompletion Reports 

36.22.1012 Samples of Cores and Cuttings 

36.22.1013 Filing of Completion Reports, Well Logs, 
Analyses, Reports, and Surveys 

36.22.1014 Blowout Prevention and Well Control 
Equipment 

Sub-Chapter 11 

Safety 

Rule 36.22.1101 Fire Hazard Prevention 

36.22.1102 Fire Walls Required 

36.22.1103 Notification and Report of Emergencies and 
Undesirable Incidents 

36.22.1104 Control and Cleanup 

36.22.1105 Solid Waste 



ADMINISTRATIVE RULES OF MONTANA 9/30/96 36-4805 



DEPARTMENT OF NATURAL RESOURCES 
AND CONSERVATION 

Sub-Chapter 12 

Production 

Rule 36.22.1201 Surface Equipment 

36.22.1202 Identification 

36.22.1203 Chokes Required 

36.22.1204 Separators Required (REPEALED) 

36.22.1205 Vacuum Pumps Prohibited 

36.22.1206 Tubing Required 

36.22.1207 Earthen Pits and Open Vessels 

36.22.1208 Producing from Different Pools Through the 
Same Casing 

Rules 36.22.1209 through 36.22.1212 reserved 

36.22.1213 Reservoir or Pool Surveys 

36.22.1214 Subsurface Pressure Tests 

36.22.1215 Stabilized Production Test 

36.22.1216 Gas Oil Ratio Tests 

36.22.1217 Water Production Report 

36.22.1218 Gas to be Metered 

36.22.1219 Gas Waste Prohibited 

36.22.1220 Associated Gas Flaring Limitation - 
Application to Exceed - Board Review and 
Action 

36.22.1221 Burning of Waste Gas Required 

36.22.1222 Hydrogen Sulfide Gas 

36.22.1223 Fencing, Screening, and Netting of Pits 
Rules 36.22.1224 and 36.22.1225 reserved 

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OIL AND GAS CONSERVATION 
Rule 36.22.1226 Disposal of Water 

36.22.1227 Earthen Pits and Ponds 

36.22.1228 Disposal by Injection (REPEALED) 

36.22.1229 Water Injection and Gas Repressuring 

36.22.1230 Application Contents and Requirements 

(REPEALED) 

36.22.1231 Notice of Application Objections 

36.22.1232 Board Authorization 

36.22.1233 Notice of Corranencement or Discontinuance - 
Plugging of Abandoned Wells (REPEALED) 

36.22.1234 Record Required (REPEALED) 

Rules 36.22.1235 through 36.22.1239 reserved 

36.22.1240 Report of Well Status Change 

36.22.1241 Service Company Reports 

36.22.1242 Reports by Producers 

36.22.1243 Reports from Transporters, Refiners, 
Purchasers and Gasoline or Extraction Plants 

36.22.1244 Producer's Certificate of Compliance 

36.22.1245 Illegal Production 

Sub-Chapter 13 

Abandonment, Plugging, and Restoration 

Rule 36.22.1301 Notice and Approval of Intention to Abandon 

Report 

36.22.1302 Notice of Abandonment 

36.22.1303 Well Plugging Requirement 

36.22.1304 Plugging Methods and Procedure 

36.22.1305 Exception for Fresh Water Wells 
ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-4807 



DEPARTMENT OF NATURAL RESOURCES 
AND CONSERVATION 

Rule 36.22.1306 Approval for Pulling Casing 

and Reentering Wells 

36.22.1307 Restoration of Surface 

36.22.1308 Plugging and Restoration Bond 

36.22.1309 Subsequent Report of Abandonment 

Sub-Chapter 14 
Underground Injection Control 
Rule 36.22.1401 Definitions 

36.22.1402 Underground Injection 

36.22.1403 Application Contents and Requirements 
Rules 36.22.1404 and 36.22.1405 reserved 

36.22.1406 Corrective Action 

36.22.1407 Signing the Application 

36.22.1408 Financial Responsibility 

36.22.1409 Hearings 

36.22.1410 Notice of Application 

36.22.1411 Board Authorization 

Rules 36.22.1412 and 36.22.1413 reserved 

36.22.1414 Notice of Commencement or Discontinuance - 
Plugging of Abandoned Wells 

36.22.1415 Records Required 

36.22.1416 Mechanical Integrity 

36.22.1417 Notification of Tests - Reporting Results 

36.22.1418 Exempt Aquifers 

36.22.1419 Tubingless Completions 

Rules 36.22.1420 and 36.22.1421 reserved 
36-4808 9/30/97 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 
Rule 36.22.1422 Permit Conditions 

36.22.1423 Injection Fee - Well Classification 

36.22.1424 Waiver of Requirement by Program Director 

36.22.1425 Area of Review 

Sub-Chapter 15 Reserved 
Sub-Chapter 16 
Regulations to Implement the Natural Gas Policy Act 
Rule 36.22.1601 Who May Apply for Determination (REPEALED) 

36.22.1602 Application Requirements and Contents 

(REPEALED) 

36.22.1603 Documents and Technical Data Supporting 
Application (REPEALED) 

36.22.1604 Docket Number (REPEALED) 

36.22.1605 List of Applications - Public Access 
(REPEALED) 

36.22.1606 Objections to Applications (REPEALED) 

36.22.1607 Deadlines for Action Determinations 
(REPEALED) 

36.22.1608 Deficient Applications (REPEALED) 

36.22.1609 Board Action on Applications (REPEALED) 

36.22.1610 Special Findings and Determinations - New 
Onshore Production Wells Under Section 103 
(REPEALED) 

36.22.1611 Special Findings and Determinations Stripper 
Well Production (REPEALED) 



ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-4809 



DEPARTMENT OF NATURAL RESOURCES 
AND CONSERVATION 

Sub-Chapter 17 

Horizontal Wells and Enhanced Recovery Tax Incentives 

Rule 36.22.1701 Certification of Horizontal Wells 

36.22.1702 Certification of Enchanced Recovery Projects 

36.22.1703 Application - Contents and Requirements 

36.22.1704 Determination of Production Decline Rate 

36.22.1705 Filing Fees 

36.22.1706 Definitions (REPEALED) 



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36-4810 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 3 6.22.101 

Sub-Chapter 1 

Organizational Rule 

36.22.101 ORGANIZATIONAL RULE (1) The board of oil and gas 

conservation organization is described in ARM 36.1.101. 

(History: Sec. 2-4-201, MCA; IMP . Sec. 2-4-201, MCA; Eff. 
12/31/72. ) 



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ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4821 



OIL AND GAS CONSERVATION 36.22.202 

Sub-Chapter 2 
Overall Procedural Rules 

36.22.201 PROCEDURAL RULES (1) The board of oil and gas 
conservation adopts the procedural rules as stated in ARM 
36.2.101. (History: Sec. 2-4-201, MCA; IMP . Sec. 2-4-201 and 
2-4-202, MCA; Eff. 12/31/72.) 

36.22.202 ENVIRONMENTAL POLICY ACT PROCEDURAL RULES ( 1 ) The 
board of oil and gas conservation adopts the procedural rules as 
stated in ARM 36.2.521 through ARM 36.2.543 and ARM 36.2.605 
through 3 6.2.611, except the terms "the agency", "the 
department", and "the board" mean the board of oil and gas 
conservation." (History: Sec. 2-3-103, 2-4-201, MCA; IMP, Sec. 
2-3-104, MCA; NEW, 1990 MAR p. 531, Eff. 3/16/90.) 



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ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4825 



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DEPARTMENT OF NATURAL RESOURCES 36.22.302 
AND CONSERVATION 

Sub-Chapter 3 

General Provisions 

36.22.301 EFFECTIVE SCOPE OF RULES (1) General rules shall 
be statewide in application unless otherwise specifically stated. 
Special rules and orders will be issued when required and shall 
prevail as against general rules if in conflict therewith. 

(History: Sec. 82-11-111, MCA; IMP, Sec. 82-11-141, MCA; Eff. 
12/31/72.) 

36.22.302 DEFINITIONS Unless the context otherwise 
requires, the words defined shall have the following meaning when 
found in these rules : 

(1) "Acidizing" means introduction of acid into a formation 
containing oil or gas to increase the producing ability of a well 
by dissolving a part of the reservoir rock or to clean the face 
of a formation. 

(2) "Aquifer" means a stratum or zone of rock which is 
sufficiently permeable to conduct ground water and to yield 
economically significant quantities of water. 

(3) "Artificial lift" means any method by which oil or 
water is removed from a well bore by use of energy transmitted 
from the surface through the same well bore. 

(4) "Barrel" means a quantity equal to 42 United States 
gallons at a temperature of 60 degrees Fahrenheit and at 
atmospheric pressure. 

(5) "Blow-out" means an uncontrolled escape of drilling 
fluid, water, oil, or gas from a well. 

(6) "Blow-out preventer" means an effective casinghead 
control equipped with special gates or rams which can be closed 
around the drill pipe or which completely closes the top of the 
casing. 

(7) "Board" means the board of oil and gas conservation 
provided for in 2-15-3303, MCA. 

(8) "Bottom hole pressure" means the pressure in pounds per 
square inch determined at the face of the producing horizon by 
means of a pressure recording instrument adopted and recognized 
by the oil and gas industry. In the case of pumping or dually 
completed wells, a sonic device may be used. In the case of gas 
wells or wells having no liquid in the well bore, it means the 
pressure as calculated by adding the pressure at the surface of 
the ground to the calculated weight of the column of gas from the 
surface to the bottom of the hole. 

(9) "Casing pressure" means the pressure existing at the 
wellhead in the annulus between the casing and tubing. 

(10) "Casinghead gas" means any gas, vapor, or both gas and 
vapor indigenous to an oil stratum and produced from the stratum 
with oil. 

ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4831 



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3 6.22.302 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(11) "Combination well" means a well productive of both oil 
and gas in commercial quantities from the same common source of 
supply. 

(12) "Completion date": 

(a) of an oil well means the date when the first oil is 
produced through wellhead equipment into lease tanks from the 
ultimate producing interval after casing has been run; 

(b) of a gas well means the date when the well is capable 
of producing gas through wellhead equipment from the ultimate 
producing interval after casing has been run; and 

(c) of a dry hole means the date the top of the surface 
casing is sealed with a cement plug, steel cap or plate, or other 
approved method. 

(13) "Completion report" means board report Form No. 4 which 
is to be submitted to the board in triplicate for all wells 
drilled as specified in ARM 36.22.1013 and ARM 36.22.1011. 

(14) "Common source of supply" is synonymous with pool. 

(15) "Condensate" means the liquid produced by the 
condensation of a vapor or gas either after it leaves the 
reservoir or while still in the reservoir. Condensate is often 
called distillate, drips, white oil, etc. 

(16) "Controlled gas field" means any common source of 
supply of natural gas discovered after July 1, 1951, or any field 
discovered prior to July 1, 1951, provided any pool therein has 
been discovered after July 1, 1951, unless otherwise designated 
by the board. 

(17) "Controlled oil field" means any common source of 
supply of crude oil discovered after July 1, 1951, or any field 
discovered prior to July 1, 1951, provided any pool therein has 
been discovered after July 1, 1951, unless otherwise designated 
by the board. 

(18) "Controlled production" means the production of oil, gas, 
or both oil and gas from a controlled oil or gas field, unless 
otherwise designated by the board. 

(19) "Crude oil" means petroleum oil and other hydrocarbons, 
regardless of gravity, which are produced at the wellhead in 
liquid form by ordinary production methods and which are not the 
result of condensation of gas before or after it leaves the 
reservoir . 

(20) "Cubic foot of gas" means the volume of gas contained 
in one cubic foot of space at a standard pressure base and a 
standard temperature base. The standard pressure base is 14.73 
pounds per square inch absolute and the standard temperature base 
is 60 degrees Fahrenheit. 

(21) "Day" means a period of twenty-four consecutive hours. 

(22) "Degrade" means lowering the quality of high-quality 
waters for a parameter (as defined in 75-5-103 (22) MCA). The 
term does not include those changes in water quality determined 
to be insignificant pursuant to 75-5-301 (5) (c) MCA are 

36-4832 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



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OIL AND GAS CONSERVATION 36.22.302 

established in subsection (4) of ARM 16.30.1003 has become worse, 
or that the concentration of other pollutants has become 
worse and will adversely affect existing beneficial uses or 
beneficial uses reasonably expected to occur in the future. 

(23) "Drilling fluid" means any fluid used in the drilling 
of an oil or gas well to remove, hold, and carry cuttings to the 
surface; to cool or lubricate a drill bit; to line the bore hole; 
to control subsurface pressures; to support the weight of the 
drill pipe or casing; to protect formations; or to transmit 
hydraulic horsepower to the drill bit. 

(24) "Dry gas" means natural gas obtained from pools that 
produce gas only or natural gas obtained that does not contain 
the heavier fractions that may easily condense under normal 
atmospheric conditions and that is not casinghead gas. 

(25) "Earthen pit" means any indentation in the ground that 
is used in oil or gas exploration or production activities 
including, but not limited to, reserve pits, skimming pits, 
settling pits, produced water pits, percolation pits, evaporation 
pits, emergency pits, and workover pits. 

(26) "Fence" means a barrier constructed of posts and wire 
or other materials. 

(27) "Flow line" : 

(a) means a pipeline used to transfer crude oil, gas, and 
produced water from the wellhead to production treatment, 
separation, or storage facilities; 

(b) also means a pipeline used to transfer produced water 
or other fluids from a production or injection facility to an 
injection or disposal well; 

(c) does not mean a transmission pipeline. 

(28) "Fracturing" means the introduction of fluid that may 
or may not carry in suspension a propping agent under pressure 
into a formation containing oil or gas for the purpose of 
creating cracks in said formation to serve as channels for fluids 
to move to or from the well bore. 

(29) "Fresh water" means water containing less than 10,000 
parts per million (ppm) total dissolved solids (TDS) . 

(30) "Freshwater-based drilling fluid" means any drilling 
fluid other than a salt-based drilling fluid or oil-based 
drilling fluid. 

(31) "Gas" means all natural gases and all other fluid 
hydrocarbons as produced at the wellhead and not defined as oil 
in 82-1-111, MCA. 

(32) "Gas allowable" means the amount of natural gas 
authorized to be produced by order of the board in connection 
with the prevention of waste. 

(33) "Gas-oil ratio" means the ratio of gas in standard 
cubic feet to oil in barrels produced concurrently during any 
stated period. 

(34) "Gas injection" means the introduction of gas or air 

NEXT PAGE IS 36-4835 
ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-4833 



OIL AND GAS CONSERVATION 36.22.302 

into a coiTiiBon source of supply in order to replenish, replace, 
or increase the energy of the reservoir. 

(35) "Gas well" means: 

(a) a well that produces natural gas only; 

(b) any well capable of producing at least 10,000 standard 
cubic feet of gas per stock tank barrel of oil per day for any 
calendar month; and 

(c) any well classed as a gas well by the board for any 
reason. 

(36) "Harm to soil(s)" means a reduction in the plant 
productivity which existed at the site of a drilling well, idled 
well, shut-in well, or production facility prior to the 
initiation of oil and gas exploration or production activities. 

(37) "Hazardous substance" means any substance defined as 
a hazardous or deleterious substance in 75-10-701, MCA. 

(38) "Hazardous waste" means any waste defined as a 
hazardous waste in ARM 17.54.303. 

(39) "Horizontal drainhole" means that portion of a wellbore 
with 70 degrees to 110 degrees deviation from the vertical and 
a horizontal projection within the common source of supply that 
exceeds 100 feet. 

(40) "Horizontal drainhole end point" means the terminus of 
a horizontal drainhole. 

(41) "Horizontal well" means: 

(a) a well with one or more horizontal drainholes; and 

(b) any other well classified by the board as a horizontal 
well . 

(42) "Illegal gas" means gas that has been produced from any 
well or wells in violation of any law or of any rule or order of 
the board. 

(43) "Illegal oil" means oil that has been produced from any 
well or wells in violation of any law or of any rule or order of 
the board. 

(44) "Irrigated cropland" means any land that is customarily 
supplied with water by artificial means for growing plants. 

(45) "MER" means maximum efficient rate and is the rate of 
production of oil, gas, and water from a well, wells, or pool 
which the board finds will result in the maximum ultimate 
recovery of oil and gas from the pool, under prudent and proper 
operations . 

(46) "Merchantable oil" means any oil that can be sold or 
traded on a commercial basis. Oil sludge, tank bottoms and waste 
oil are not merchantable oils. 

(47) "Net" means an open-meshed, twisted, knotted, knitted, 
or woven material used to completely cover a pit, pond, tank, or 
other oil or gas exploration or production facility. 

(48) "Oil" means crude petroleum oil and other hydrocarbons 
regardless of gravity that are produced at the wellhead in liquid 
form by ordinary production methods and that are not the result 
of condensation of gas before or after it leaves the reservoir. 

ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-4835 



36.22.302 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(82-1-111, MCA.) 

(49) "Oil allowable" means the amount of oil authorized to 
be produced by order of the board in connection with the 
prevention of waste. 

(50) "Oil sludge" means a viscous, unmerchantable oil that 
contains mud or other impurities. 

(51) "Oil well" means any well capable of producing oil in 
commercial quantities and that is not a gas well. 

(52) "Operator" means any person who, duly authorized, is 
in charge of development and/or producing operations. 

(53) "Owner" means the person who has the right to drill 
into and produce from a pool and to appropriate the oil or gas 
the person produced from a pool either for the person or others 
for the person, and the term includes all persons holding that 
authority by or through the person with the right drill. 
(82-11-101, MCA.) 

(54) "Perennial watercourse" means a lake, stream, river, 
or other body of water that flows or retains water continuously 
throughout the year . " 

(55) "Permeability" means that property of a porous media 
that designates its ability to transmit fluids. 

(56) "Person" means any natural person, corporation, 
association, partnership, receiver, trustee, executor, 
administrator, guardian, fiduciary, or other representative of 
any kind and includes any agency or instrumentality of the state 
or any governmental subdivision of the state. (82-1-111, MCA.) 

(57) "Porosity" means the ratio of rock pore volume to rock 
bulk volume expressed as a percentage. 

(58) "Potential" means the actual or properly computed daily 
ability of a well to produce oil or gas or both. 

(59) "Pressure maintenance" means the introduction of fluid 
or fluids into an oil or gas reservoir to retard the decline of 
or increase the pressure of the reservoir. 

(60) "Produced fluid" means any fluid, including oil, gas, 
and water, originating from subsurface geologic sources. 

(61) "Production facility" means any facility or site 
constructed or used for the purpose of producing, treating, or 
separating produced fluid, including but not limited to, oil, 
gas, injection, or disposal wells, pumping units, flow lines, gas 
flares, treaters, separators, gun barrels, storage tanks, 
production pits and ponds, skimmer pits, and evaporation pits or 
ponds. A transmission pipeline is not a production facility. 

(62) "Proved productive area" means that area which has been 
shown by development and/or geological information to be such 
that additional wells drilled thereon are reasonably certain to 
be commercially productive of oil or gas or both. 

(63) "Purchaser" means any person who directly or indirectly 
purchases, transports, takes, or otherwise removes production 
to his account from a well, wells, or pool. 

36-4836 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.3 02 

(64) "Reservoir pressure" means bottom hole pressure under 
static conditions. 

(65) "Saltwater-based drilling fluid" means any drilling 
fluid containing sodium chloride in concentrations of more than 
10,000 parts per million (ppm) , or lime (calcium oxide or calcium 
carbonate) in concentrations of more than 40,000 ppm, or gypsum 
(calcium sulfate) in concentrations of more than 50,000 ppm. 

(66) "Screen" means an open-meshed, twisted, knotted, 
knitted or woven material that is firmly attached to a fence. 

(67) "Service company" means any person, other than an 
operator or a drilling contractor, that provides goods or 
services associated with oil or gas exploration and production 
operations . 

(68) "Solid waste" means any waste defined as a solid waste 
under 75-10-103, MCA. 

(69) "Spacing unit" means the area that can be efficiently 
drained by one well. 

(70) "Standard conditions of temperature and pressure" means 
14.73 pounds per square inch absolute and 60 degrees Fahrenheit. 

(71) "Stratigraphic well or core hole" means a well drilled 
for stratigraphic information only. 

(72) "Stripper gas well" means a gas well that produces an 
average of 60 thousand standard cubic feet (MCF) or less of gas 
per day for a calendar month. 

(73) "Stripper oil well" means an oil well that produces 
less than an average of 10 barrels of oil per day for a calendar 
month. 

(74) "Tank bottoms" means the unmerchantable oil, basic 
sediment, and water in oil production storage tanks, separators, 
and other production facilities and receptacles. 

(75) "Transmission pipeline" means a pipeline used to gather 
and transfer marketable crude oil or natural gas from production 
treatment, separation, and storage facilities. A flow line is 
not a transmission pipeline. 

(76) "Tubing pressure" means the pressure existing in the 
tubing at the wellhead. 

(77) "Water injection or water flooding" means the injection 
of water into a pool through one or several wells to achieve 
displacement of the oil from the pool. 

(78) "Waste": 

(a) means physical waste, as the term is generally 
understood in the oil and gas industry; 

(b) means the inefficient, excessive, or improper use of, 
or the unnecessary dissipation of reservoir energy; 

(c) means the location, spacing, drilling, equipping, 
operating, or producing of any oil or gas well or wells in a 
manner that causes or tends to cause reduction in the quality of 
oil or gas ultimately recoverable from a pool under prudent and 
proper operations or that causes or tends to cause unnecessary 
or excessive surface loss or destruction of oil or gas; and 

ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-4837 



3 6.22.303 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(d) means the inefficient storing of oil or gas; but 

(e) does not mean the production of oil or gas from any 
pool or by any well to the full extent that the well or pool can 
be produced in accordance with methods designed to result in 
maximum ultimate recovery, as determined by the board. 

(82-11-101, MCA.) 

(79) "Waste oil" means discarded or unmerchantable oil. 

(80) "Well logs" means electrical, radiation, sonic, or 
other routine logs run by mechanical means in a well and all 
other logs, surveys, analyses, and reports run or made. 

(81) "Well, wildcat or exploratory": 

(a) means any well drilled for oil or gas outside of a 
delineated field; 

(b) means a well drilled to a stratum other than one then 
productive within a delineated field; but 

(c) does not mean a stratigraphic well or core hole. 
(History: 82-11-111, MCA; IMP . 82-11-111, MCA; Eff. 12/31/72; 

AMD . 1977 MAR p. 549, Eff. 9/24/77; AMD , 1982 MAR p. 1398, Eff. 
7/16/82; AMD, 1992 MAR p. 806, Eff. 4/1/92; AMD, 1993 MAR p. 152, 
Eff. 7/1/93; AMD, 2000 MAR p. 3542, Eff. 12/22/00.) 

3 6.22.3 03 CLASSIFICATION OF WILDCAT OR EXPLORATORY WELLS 

(1) If a test for fluid productivity is made in a 
stratigraphic well or core hole, the well must be reclassified 
as "wildcat or exploratory" and is subject to all the rules of 
a well drilled for oil or gas. 

(2) Wells drilled in a delineated field to known productive 
horizons cannot be classified as "stratigraphic." (History: 
82-11-111, MCA; IMP, 82-11-111, MCA; Eff. 12/31/72; AMD, 1977 MAR 
p. 549, Eff. 9/24/77.) 

36.22.304 INSPECTION OF RECORDS, PROPERTIES. AND WELLS 

(1) The petroleum engineer and his authorized agents shall 
have access to all factual well records. 

(2) The petroleum engineer and his authorized agents shall 
have the right at all reasonable times to go upon and inspect any 
oil and gas properties and wells for the purpose of making any 
investigation or tests to ascertain whether the provisions of 
Title 82, chapter 11, parts 1 and 2, these rules, or any special 
rules or orders are being complied with and shall report any 
violation thereof to the board. 

(3) All owners, drilling contractors, drillers, service 
companies, and other persons engaged in drilling or servicing 
wells, shall permit the petroleum engineer ojr authorized agents 
at his or their risk in the absence of negligence on the part of 
the owner to come upon any lease, property, or well operated or 
controlled by them to inspect the records and operation of such 
wells and to have access at all times to all records of wells. 



36-4838 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 3 6.22.307 

(History: 82-11-111, MCA; IMP, 82-11-111, MCA; Eff. 12/21/72; 
AMD . 1982 MAR p. 1398, Eff. 7/16/82; AMD, 2000 MAR p. 3542, Eff. 
12/22/00. ) 

36.22.305 NAMING OF POOLS (REPEALED) (History: 82-11-111, 
MCA; IMP, 82-11-111, MCA; Eff. 12/31/72; REP, 1996 MAR p. 1160, 
Eff. 4/26/96.) 

36.22.306 ORGANIZATION REPORTS (1) On or before 
January 31, 1954, every person acting as principal or as agent 
for another who is independently engaged in oil and gas 
operations in the state shall file under oath with the board on 
Form No. la statement giving the following information: 

(a) the name under which such business is being operated 
or conducted; 

(b) the name and post office address of such person and 
the business or businesses in which he is engaged; 

(c) the plan or organization and, in case of a 
corporation, the law under which it is chartered; and 

(d) the post office addresses of any persons acting as 
trustees together with the names of the manager, agent, or 
executive thereof, and the names and post office addresses of 
any officers thereof. 

(2) Immediately after any change occurs as to facts stated 
in the report filed as required by (1), a supplementary report 
under oath shall be filed with the board with respect to such 
change. (History: 82-11-111, MCA; IMP, 82-11-122 and 82-11-123, 
MCA; Eff. 12/31/72; AMD, 1982 MAR p . 1398, Eff. 7/16/82.) 

3 6.22.3 07 ADOPTION OF FORMS (1) The forms hereinafter 
listed are hereby adopted and made a part of these rules for all 
purposes, and the same must be used as herein directed in giving 
notice and in making reports and requests to the board. Copies 
of printed forms will be supplied by the board on request. 
Address requests for forms to: Board of Oil and Gas Conserva- 
tion, 1625 Eleventh Avenue, Helena, Montana 59620-1601. 

Organization Report 
Sundry Notice and Report of Wells 
Bond 

Completion Report 
Report of Subsurface Injections 
Report of Production 

Transportation Agency's Monthly Report 
of Receipts and Disposition of Crude 
Oil 
(h) Form No. 8 Refiner's Monthly Report of Receipts 

and Disposition of Crude Oil 
(i) Form No. 9 Monthly Gas Report 

(j) Form No. 10 Gasoline or other Extraction Plant 
(k) Form No. lOA Continuation Sheet Form 10 

ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-4839 



(a) 


Form 


No. 


1 


(b) 


Form 


No. 


2 


(c) 


Form 


No. 


3 


(d) 


Form 


No. 


4 


(e) 


Form 


No. 


5 


(f ) 


Form 


No. 


6 


(g) 


Form 


No. 


7 



36.22.308 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(1) Form No. 11 Reservoir Survey Report and Gas-Oil 

Ratio 
(in) Form No. 13 Producers Certificate of Compliance 

and Authorization to Transport Oil 

and Gas from Lease 
(n) Form No. 14 Certificate of Deposit Cash Bond 
(o) Form No. 18 Domestic Well Bond and Lien 
(p) Form No. 19 Release Agreement 

(q) Form No. 20 Notice of Intent to Change Operator 
(r) Form No. 22 Application for Permit (Drill, Deepen 

or Re-Enter) 
(s) Form No. 23 Application for Permit (Earthen Pit or 

Pond) 
(t) Form No. 24 Irrevocable Standby Letter of Credit 

(History: 82-11-111, MCA; IMP, Sec. 2-4-201, MCA; Eff. 
12/31/72; AMD, 1977 MAR p. 549, Eff. 9/4/77; AMD, 1982 MAR p. 
1398, Eff. 7/16/82; AMD, 1984 MAR p. 931, Eff. 6/15/84; AMD . 
1990 MAR p. 305, Eff. 2/9/90; AMD, 1992 MAR p. 654, Eff. 4/1/92; 
AMD . 2000 MAR p. , Eff. 12/22/00.) 

36.22.308 SEAL OF BOARD (REPEALED) (History: 82-11-111, 
MCA; IMP . 82-11-111, MCA; Eff. 12/31/72; REP . 1982 MAR p. 1398, 
Eff. 7/16/82.) 

36.22.309 REFERRAL OF ADMINISTRATIVE DECISIONS ( 1 ) The 
board administrator may refer any administrative action or 
decision to the board for consideration. 

(2) Administrative actions or decisions referred by the 
board administrator to the board for consideration must be 
presented in the form of a petition, and are subject to the 
notice and hearing requirements of 82-11-141, MCA. (History: 
82-11-111, 82-11-115, MCA; IMP, 82-11-115 and 82-11-141, MCA; 
NEW . 1993 MAR p. 152, Eff. 7/1/93.) 



NEXT PAGE IS 3 6-4851 
36-4840 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 3 6.22.403 

Sub-Chapter 4 
Board Employees 

36.22.401 OFFICE AND DUTIES OF PETROLEUM ENGINEER (IS 
HEREBY REPEALED) (History: Sec. 82-11-111, MCA; IMP . Sec. 
2-15-3303, MCA; Eff. 12/31/72; REP, 1982 MAR p. 1398, Eff. 
7/16/82. ) 

36.22.402 OFFICE AND DUTIES OF ADMINISTRATOR (IS HEREBY 
REPEALED) (History: Sec. 82-11-111, MCA; IMP, Sec. 2-15-3303, 
MCA; Eff. 12/31/72; REP, 1982 MAR p. 1398, Eff 7/16/82.) 

3 6.22.403 OFFICE AND DUTIES OF GEOLOGIST (IS HEREBY 
REPEALED) (History: Sec. 82-11-111, MCA; IMP. Sec. 2-15-3303, 
MCA; Eff. 12/31/72; REP, 1982 MAR p. 1398, Eff 7/16/82.) 



NEXT PAGE IS 36-4871 
ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4851 



OIL AND GAS CONSERVATION 3 6.22.502 

Sub-Chapter 5 

Seismic Exploration Activities 

36.22.501 SHOT LOCATION LIMITATIONS (1) No vibroseis 
shall be done closer than 330 feet, or seismic shot hole drilled 
or surface charge set closer than 1320 feet (1/4 mile) to any 
building, structure, water well, or spring; nor closer than 660 
feet (1/8 mile) to any reservoir dam without written permission 
of the surface owner. (History: Sec. 82-1-104, MCA; IMP, Sec. 
82-1-104, MCA; NEW, 1977 MAR p. 1196, Eff. 12/24/77; AMD, 1982 
MAR p. 1398, Eff. 7/16/82; mO, 1983 MAR p. 1193, Eff. 8/26/83; 
AMD . 1987 MAR p. 1095, Eff. 7/17/87.) 

3 6.22.502 PLUGGING AND ABANDONMENT Unless otherwise 
agreed to between the surface owner; the company, firm, 
corporation, or individual responsible for the drilling of 
seismic shot holes; and the board's designated inspector, all 
such holes shall be plugged and abandoned as set forth below; 
provided, however, that before the surface owner agrees to a 
plugging method which deviates from this rule, he must be given 
a copy of this rule: 

(1) The seismic company responsible for the plugging and 
abandonment of seismic shot holes shall notify the board in 
writing at its Billings office of its intent to plug and 
abandon, including the date and time such activities are 
expected to commence, the location by section, township and 
range of the holes to be plugged, and the name and telephone 
number of the person in charge of the plugging operations. A 
copy of this notice shall be sent to the surface owner at the 
same time. 

(2) All seismic shot holes shall be plugged before 
shooting. Exceptions may be granted after approval by the 
board's designated inspector. In the event the original plug 
does not hold, the hole shall be properly plugged as soon as 
reasonably practicable; however, in no event shall any hole 
remain unplugged for a period of more than 3 days unless, upon 
application, the board or its staff grants an extension which 
may not exceed 90 days. All holes shall be temporarily capped 
during the period between drilling and final plugging. 

(3) When drilling seismic shot holes, and non-artesian 
water is encountered or when water is used in conjunction with 
the drilling, plugging shall be accomplished by filling the hole 
with coarse ground bentonite from the bottom up to 5 feet above 
the static water level with a minimum of 100 pounds of 
bentonite. The hole shall be further filled and tamped with 
cuttings to a depth of three feet below ground level. All shot 
holes drilled in the glacial till area of Montana as shown on 



ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4871 



36.22.502 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

USGS Miscellaneous Geologic Investigations Map 1-327 shall be 
filled with coarse ground bentonite from the bottom to 3 feet 
below the surface. A commercial plug shall be set at this depth 
with a permit number or the name of the contractor either 
imprinted on the plug or on a plastic or metallic tag securely- 
attached to the plug. The remainder of the hole shall be filled 
with cuttings and soil, and a sufficient mound shall be left 
over the hole to allow for settling. 

(a) With the approval of the board's designated 
inspector the shot hole may be plugged by filling the hole with 
bentonite-water slurry by hose injection and displacement 
upwards from the maximum depth attainable. The slurry mixture 
shall have a marsh funnel viscosity of 60 seconds or greater per 
quart (subject to field verification on site) and shall contain 
a minimum of 28 pounds of commercial plugging bentonite per 42 
gallons of water. The hole shall be filled to a depth of 3 feet 
below ground level and the commercial plug shall be set at this 
depth. The remainder of the hole shall be filled with cuttings 
and soil, and a sufficient mound shall be left over the hole 
to allow for settling. 

(b) Seismic holes that penetrate artesian water deposits 
shall be stabilized with a cement slurry to a level not higher 
than three feet below the surface of the ground. The cement 
slurry shall be of sufficient density to contain the waters to 
their native strata. The remainder of the hole shall be filled 
with native surface material. When alkaline or saline waters 
are encountered, the hole shall be plugged immediately as set 
forth in (3) and (a) except, if the bentonite-water slurry 
method is used, a heavier slurry mix must be used with the 
addition of inorganic drying or stabilizing chemicals such as 
calcium chloride, sodium bicarbonate, or soda ash to assist in 
the effective plugging and stability of the bentonite column in 
the hole. 

(c) In completely dry holes, plugging shall be 
accomplished by filling the hole with not less than 50 pounds of 
coarse ground bentonite followed by the cuttings. The returned 
cuttings shall be tamped to insure the hole is not bridged. The 
hole shall be filled to a depth of 3 feet below the surface and 
the commercial plug set and topped with cuttings and soil as 
prescribed by paragraph (3) (a) . 

(i) With approval of the board's designated inspector, the 
shot hole may be plugged by filling the hole with the 
bentonite-water slurry mixture as set forth in paragraph (a) . 

(d) Seismic shot holes that crater or slough at the 
surface after being shot shall be plugged as set forth in 
subsections (3), (a) and (b) insofar as those procedures are 



36-4872 9/30/95 ADMINISTRATIVE RULES OF MONTANA 



36.22.502 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

uses Miscellaneous Geologic Investigations Map 1-327 shall be 
filled with coarse ground bentonite from the bottom to 3 feet 
below the surface. A commercial plug shall be set at this depth 
with a permit number or the name of the contractor either 
imprinted on the plug or on a plastic or metallic tag securely 
attached to the plug. The remainder of the hole shall be filled 
with cuttings and soil, and a sufficient mound shall be left 
over the hole to allow for settling. 

(a) With the approval of the board's designated 
inspector the shot hole may be plugged by filling the hole with 
bentonite-water slurry by hose injection and displacement 
upwards from the maximum depth attainable. The slurry mixture 
shall have a marsh funnel viscosity of 60 seconds or greater per 
quart (subject to field verification on site) and shall contain 
a minimum of 28 pounds of commercial plugging bentonite per 42 
gallons of water. The hole shall be filled to a depth of 3 feet 
below ground level and the commercial plug shall be set at this 
depth. The remainder of the hole shall be filled with cuttings 
and soil, and a sufficient mound shall be left over the hole 
to allow for settling. 

(b) Seismic holes that penetrate artesian water deposits 
shall be stabilized with a cement slurry to a level not higher 
than three feet below the surface of the ground. The cement 
slurry shall be of sufficient density to contain the waters to 
their native strata. The remainder of the hole shall be filled 
with native surface material. When alkaline or saline waters 
are encountered, the hole shall be plugged immediately as set 
forth in (3) and (a) except, if the bentonite-water slurry 
method is used, a heavier slurry mix must be used with the 
addition of inorganic drying or stabilizing chemicals such as 
calcium chloride, sodium bicarbonate, or soda ash to assist in 
the effective plugging and stability of the bentonite column in 
the hole. 

(c) In completely dry holes, plugging shall be 
accomplished by filling the hole with not less than 50 pounds of 
coarse ground bentonite followed by the cuttings. The returned 
cuttings shall be tamped to insure the hole is not bridged. The 
hole shall be filled to a depth of 3 feet below the surface and 
the commercial plug set and topped with cuttings and soil as 
prescribed by paragraph (3) (a) . 

(i) With approval of the board's designated inspector, the 
shot hole may be plugged by filling the hole with the 
bentonite-water slurry mixture as set forth in paragraph (a). 

(d) Seismic shot holes that crater or slough at the 
surface after being shot shall be plugged as set forth in 
subsections (3), (a) and (b) insofar as those procedures are 



36-4872 9/30/95 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 3 6.22.503 

reasonably possible. However, deviations from those procedures 
are permissible as circumstances may dictate, provided the 
procedures are designed to accomplish the primary objective of 
containing waters penetrated by the hole to their native strata 
and restoring the surface as near as practicable to its original 
conditions. The board and surface owner shall be notified of 
such deviations . 

(4) The surface area around each seismic shot hole shall 
be restored- to its original condition insofar as such 
restoration is practicable. Cuttings shall be spread no deeper 
than 1 inch thick and all stakes, markers, cables, ropes, wires, 
primacord, cement or mud sacks, and any other debris or material 
not native to the area shall be removed from the drill site and 
deposited in a convenient sanitary landfill or other approved 
site or disposed of by an approved disposal method. Appropriate 
seeds shall be planted when required to restore the surface to 
its original condition. 

(5) A seismic shot hole may be left unplugged at the 
request of the surface owner for conversion to a fresh water 
well provided the surface owner executes a release on Form No. 
19 relieving the party otherwise responsible for the plugging 
and abandonment of the hole from any liability for damages that 
may thereafter result from the hole remaining unplugged. This 
release will cite the date, location, surface elevation, depth 
to aquifer, and any action taken. This information shall be 
furnished by the geophysical operator. The surface owner must 
also notify and file within 30 days appropriate forms with the 
water rights bureau of the department of natural resources and 
conservation. The surface owner must also apply for a permit 
from the board of water well contractors, and explain in detail 
the procedures to be used in constructing the well. This is to 
insure that the shot hole is properly constructed, cased and 
developed into a water well, according to the minimum 
construction standards for water wells, as adopted by the board 
of water well contractors. (History: Sec. 82-1-104, MCA; IMP . 
Sec. 82-1-104, MCA; NEW, 1977 MAR p. 1196, Eff. 12/24/77; AMD . 
1982 MAR p. 1964, Eff. 10/29/82; AMD, 1983 MAR p. 1193, Eff. 
8/26/83; AMD . 1984 MAR p. 931, Eff. 6/15/84; AMD . 1987 MAR p. 
1095, Eff. 7/17/87.) 

36.22.503 NOTIFICATION (1) The county clerk and 
recorder of the county in which a permit for geophysical 
activity is issued shall immediately forward notice of the 
issuance of such permit to the board of oil and gas conservation 
at its office in Billings, Montana. 

(2) The board shall notify the county clerk and recorder 
of the county if the person, firm, or corporation which has 



ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4873 



36.22.504 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

obtained a permit is not in compliance with any applicable 
requirement for engaging in geophysical activity within the 
state . 

(3) If the board of oil and gas conservation determines 
that a person, firm, or corporation has violated any provisions 
of this act, the board shall take necessary action to assure 
compliance . 

(4) Before commencing geophysical activity, the person, 
firm, or corporation shall notify the surface user as to the 
approximate time schedule of the planned activity and upon 
request the following information shall also be furnished; 

(a) the name and permanent address of the geophysical 
exploration firm along with the name and address of the firm's 
designated agent for the state if different from that of the 
firm' s ; 

(b) evidence of a valid permit to engage in geophysical 
exploration; 

(c) name and address of the company insuring the 
geophysical firm; 

(d) the number of the bond required in section 82-1-104, 
MCA, to be filed with the secretary of state; 

(e) a description of the surface areas where the planned 
geophysical activity will take place; 

(f) anticipated need, if any, to obtain water from the 
surface user during planned geophysical activity. (History: 
Sec. 82-11-111, MCA; IMP . Sec. 82-1-103, and Sec. 82-1-105 
through 82-1-107, MCA; NEW , Eff. 12/24/77; AMD , 1982 MAR p. 
1398, Eff. 7/16/82.) 

36.22 ■ 504 IDENTIFICATION (1) Each unit of mobile 

equipment utilized in seismic exploration or plugging seismic 
shot holes shall display on both sides in conspicuous lettering 
the name of the holder of the geophysical exploration permit by 
or for whom the work is being done and the telephone number of 
the permit holder. (History: Sec. 82-1-101, MCA; IMP, Sec. 
82-1-101, MCA; NEW, 1983 MAR p . 1193, Eff. 8/26/83.) 



NEXT PAGE IS 3 6-4891 
36-4874 9/30/95 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.601 

Sub-Chapter 6 

Permit to Drill 

36.22.601 NOTICE OF INTENTION AND PERMIT TO DRILL ( 1 ) No 
person shall commence the drilling of an oil or gas well or 
stratigraphic test well or core hole without filing an 
application for permit to drill on Form No. 22 and obtaining a 
drilling permit from the board. If the proposed well or hole is 
not located within the boundaries of a delineated field for 
which, after public hearing, an order has been entered by the 
board that drilling permits may issue for locations within that 
field without further public hearing, the applicant must: 

(a) At its own expense, cause publication of notice in a 
format prescribed by the board in one issue of a newspaper in 
general circulation in Helena and a newspaper of general 
circulation in the county where the proposed well or hole is 
located; and 

(b) File proof of such publication in the form of a copy 
of the page on which the ad appears showing the ad and the date 
of publication or an affidavit of the publisher. 

(2) Prior to the commencement of recompletion operations 
on any oil or gas well, notice shall be delivered to the board 
of such intention on Form No. 2, and approval shall be obtained. 

(3) When a permit is sought for a 320 acre drilling or 
spacing unit. Form No. 22 as filed with the board shall include 
a description of the lands to be included. 

(4) The staff of the board shall refer an application for 
permit to drill to the board for notice and public hearing if: 

(a) An interested person shall, as to any application for 
permit to drill for which published notice is required, file in 
the form hereinafter set forth a written demand for an 
opportunity to be heard concerning such application; or 

(b) The staff determines that a person applying for a 
drilling permit or approval of recompletion operations is not in 
substantial compliance with the board's rules governing the 
applicant's operations in Montana; or 

(c) The planned drilling operations require further 
environmental review. 

(5) In those instances where such requests for a permit to 
drill have been the subject of notice and public hearing, the 
board shall, after such hearing, either: 

(a) Enter its order granting such permit under such 
conditions as the board shall find proper and necessary; or 

(b) Enter its order denying the application for the permit. 

(6) A demand for opportunity to be heard concerning any 
application for permit to drill for which published notice is 
required must: 

(a) Be in writing; and 

(b) Set forth the name, address, and telephone number of 

ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4891 



i 



36.22.602 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

each party making the demand, and their ownership interest, if 
any, in the lands surrounding the drill site; and 

(c) Set forth the specific reasons why the party requests 
a hearing regarding the issuance of the proposed drilling 
permit; and 

(d) Be received by the board no later than ten (10) days 
after the date of the publication of the notice. Where the 
notice is not published on the same day in the newspapers 
specified in paragraph (1) (a) of this rule, the deadline for 
receiving demands for hearing will be measured by the later 
publication date. Service of such demand may be made on the 
board personally, by mail, or by FAX transmission; and 

(e) Be simultaneously served upon the applicant for the 
permit by written copy mailed or FAX transmitted to the address 
or number set forth in the published notice. A certificate of 
such service must accompany the demand as filed with the board. 

(7) Surface owner concerns which are subject to the 
provision of 82-10-504, MCA (Surface Damage and Disruption 
Payments) will not be the subject of a public hearing before the 
board. (History: Sec. 82-11-111, MCA; IMP , Sec. 82-11-122, MCA; 
Eff. 12/31/72; AMD, Eff. 6/4/77; AMD, 1982 MAR p. 1398, Eff. 
7/16/82; AMD, 1983 MAR p. 82, Eff. 1/28/83; AMD, 1990 MAR. p. 
305, Eff. 2/9/90.) 

3 6.22.602 NOTICE OF INTENTION TO DRILL AND APPLICATION FOR 
PERMIT TO DRILL (1) A notice of intention and application for 
permit to drill must include a survey plat certified by a 
registered surveyor and showing the location of the proposed 
well with reference to the nearest lines of an established 
public survey. 

(2) An operator may not deviate from the board approved 
permit to drill and conditions thereon without approval of the 
board administrator. The board administrator may impose further 
permit modifications or conditions at any time should the 
factual situation warrant such modifications or conditions. 
(History: 82-11-111, MCA; IMP, 82-11-122, MCA; Eff. 12/31/72; 
AMD . Eff. 6/4/77; AMD, 1982 MAR p. 488, Eff. 3/12/82; AMD, 1982 
MAR p. 1398, Eff. 7/16/82; AMD, 1992 MAR p. 654, Eff. 4/1/92.) 

36.22.603 PERMIT FEES (1) Notice of intention to drill an 
oil or gas well or stratigraphic test well or core hole shall 
also be accompanied by payment of a fee, as follows: 

(a) for each well whose estimated depth is 3500 feet or 
less, $25.00; 

(b) from 3501 feet to 7000 feet, $75.00; 

(c) 7001 feet and deeper, $150.00. 

(2) Permits for deepening wells shall require the payment 
of fees for the estimated new total depth; where fees have been 
paid for the previous depth, credit shall be given therefor. 

36-4892 9/30/95 ADMINISTRATIVE RULES OF MONTANA 



^ 



) OIL AND GAS CONSERVATION 3 6.22.60 5 

(History: 82-11-111 MCA; IMP, 82-11-134 MCA; Eff. 12/31/72; 
AMD . Eff. 6/4/77; AMD, 1982 MAR p. 1398, Eff. 7/16/82.) 

36.22.604 PERMIT ISSUANCE - EXPIRATION - EXTENSION 

(1) If no written demand for hearing has been filed within 
ten (10) days following the date of publication of the notice as 
specified in ARM 36.22.601 and the planned drilling operations 
do not require further environnnental review, and the application 
complies in all respects with the applicable rules of the board, 
a permit shall be issued promptly by the petroleum engineer or 
his authorized agent. 

(2) If the application for permit does not comply in all 
respects with such rules, said application shall be disallowed, 
and the petroleum engineer or his authorized agent shall 
promptly notify the person of the reason or reasons for such 
disallowance . 

(3) If drilling is not commenced, no such permit to drill 
shall be valid after the expiration of a period of six months 
from the date of the issuance thereof by the board or its 
authorized agents. Any permittee who fails to commence drilling 
within the six months period of the permit must file a new 
application for permit to drill and pay the fee therefor. 

(4) A permittee must advise the board, either verbally or 
A in writing, of the date of spudding a permitted well within 72 
" hours of commencing drilling. (History: 82-11-111 MCA; IMP, 

82-11-122 and 82-11-134 MCA; Eff. 12/31/72; AMD, Eff. 6/4/77; 
AMD , 1982 MAR p. 1398, Eff. 7/16/82; AMD, 1990 MAR p. 305, Eff. 
2/9/90; AMD, 1995 MAR p. 285, Eff. 2/24/95.) 

36.22.605 TRANSFER OF PERMITS (1) No person to whom a 
permit has been issued shall transfer the permit to any other 
location or to any other person until the following requirements 
have been complied with: 

(a) If prior to the drilling of a well the person holding 
a permit desires to change the location, he shall submit another 
notice on Form 2 with a survey plat as specified in ARM 
36.22.602. No additional permit fee is necessary if the 
estimated depth is to be the same as the originally intended 
well; but drilling shall not be started until the transfer has 
been approved. 

(b) If, while a well is being drilled, the person holding 
a permit disposes of his interests in the well, he shall comply 
with the transfer requirements set forth in ARM 36.22.1308. 

(History: 82-11-111 MCA; IMP, 82-11-122 and 82-11-134 MCA, Eff. 
12/31/72; AMD, 1990 MAR p. 305, Eff. 2/9/90; AMD, 1995 MAR p. 
285, Eff. 2/24/95.) 



ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4893 



3 6.22.606 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

36.22.606 NOTICE AND ELIGIBILITY STATEMENT FOR DRILLING OR 
RECOMPLETION IN UNIT OPERATIONS (1) If the applicant desires 
a statement from the petroleum engineer to be filed with another 
state or federal agency relating to the need for an additional 
well or recompletion operation, and further, if either the 
notice applies to a gas well to be drilled or recompleted at a 
location and to a formation, zone, or depth which is unitized 
under a unit agreement approved by the board of oil and gas 
conservation pursuant to 82-11-204 through 82-11-216, MCA, and 
as to which all applicable well spacing rules and orders, 
excepting well location rules and orders applicable to exterior 
boundaries shall have been removed or the notice applies to a 
recompletion within an established spacing unit in the same 
reservoir, the applicant shall file the notice and an eligibili- 
ty statement acceptable to the petroleum engineer. 

(2) Such eligibility statement shall justify the need for 
the drilling of the new well or the performance of the recomple- 
tion operation and shall include geologic and engineering 
evidence as may be necessary for the petroleum engineer to 
determine that the new well or the recompletion operation is 
needed. 

(3) The petroleum engineer shall make a written finding as 
to the sufficiency of the eligibility statement, including the 
need for the new well or the recompletion operation. 

(4) Should the petroleum engineer fail to issue a drilling 
or recompletion permit within 10 days of filing the notice and 
eligibility statement, the applicant may apply to the board for 
a determination for the need for the new well or the recompleti- 
on operation, and a hearing on such application shall be held at 
the next regularly scheduled meeting of the board. (History: 
82-11-111 MCA; IMP, 82-11-122 and 82-11-134 MCA, Eff. 12/31/72; 
AMD, Eff. 6/4/77.) 

36.22.607 DRILLING PERMITS PENDING SPECIAL FIELD RULES 

(1) Upon receipt by the board of an application or 
petition from any person requesting the establishment of special 
field rules for spacing of wells within a certain designated 
area all or a portion of which is not then subject to field 
rules or upon a decision by the board to call a hearing for the 
establishment of such special field rules, applications for 
permits to drill within such area will be held in abeyance by 
the board until such time as the matter has been fully heard and 
determined, unless the location of the well or wells in such 
applications to drill conform to the spacing applied for. 

(2) In the event two or more applications for spacing 
covering all or a portion of the same area are awaiting hearings 
at the same time, applications for permits to drill within such 
area will be approved only if such applications conform to the 



36-4894 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.607 

largest spacing applied for. (History: 82-11-111 MCA; IMP . 
82-11-124 and 82-11-201 MCA, Eff. 12/31/72; AMD, 2000 MAR p. 
3542, Eff. 12/22/00.) 



NEXT PAGE IS 36-4901 
ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-4895 



OIL AND GAS CONSERVATION 3 6.22.702 

Sub-Chapter 7 
Well Spacing Units 

36.22.701 SPACING UNITS GENERAL (IS HEREBY REPEALED) 
(History: 82-11-111 MCA; IMP, 82-11-201 MCA; Eff. 12/31/72; AMD . 
1977 MAR p. 549, Eff. 9/24/77; REP, 1982 MAR p. 1398, Eff. 
7/16/82.) 

36.22.702 SPACING OF WELLS In proven oil and gas fields, 
the spacing of wells as well as the establishment of spacing 
units will be governed by special field rules for the particular 
field to be adopted after notice and hearing. In the absence of 
special field rules, the following rules shall govern: 

(1) Unless a special exception is granted after notice and 
hearing, no stratigraphic test or core hole or wildcat or 
exploratory well with a projected depth of 6,000 feet or less 
shall be located closer than 330 feet to any legal subdivision 
line, except that a 75 foot tolerance to move closer to the 
quarter-quarter section lines will be allowed in extremely rough 
terrain where it is impractical to move in any other direction, 
but only after inspection of the location by a representative of 
the board and subsequent approval by the petroleum engineer or 
his authorized agent. 

(2) A legal subdivision is hereby defined by the board as 
being a regular governmental quarter-quarter section or govern- 
mental lot corresponding thereto, consisting of 40 acres more or 
less . 

(3) No stratigraphic test or core hole or wildcat or 
exploratory well with a projected depth between 6,000 feet and 
11,000 feet shall be located closer than 660 feet to any 
governmental quarter section line, except that a 150-foot 
tolerance to move closer to the quarter section lines will be 
allowed in extremely rough terrain where it is impractical to 
move in any other direction, but only after inspection of the 
location by a representative of the board and subsequent 
approval by the petroleum engineer or his authorized agent. 

(4) Before any stratigraphic test or core hole or wildcat 
or exploratory well with a projected depth greater than 11,000 
feet may be commenced, two contiguous governmental quarter 
sections (which may lie in either one or two governmental 
sections) shall be designated as the 320-acre drilling unit for 
such well. Such designation shall be made by the operator or 
operators of the two governmental quarter sections described in 
the designation, and the designation shall be subject to 
administrative approval by the board. 

(5) A stratigraphic test or core hole or wildcat or ex- 
ploratory well with a projected depth greater than 11,000 feet 



ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4901 



3 6.22.703 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

shall be located no closer than 660 feet to any governmental 
quarter section line which is an exterior boundary of a 320-acre 
drilling unit and only one well shall be permitted to produce 
from the same reservoir within the same 320-acre drilling unit. 

(6) A 320-acre drilling unit is defined by the board as 
two contiguous regular governmental quarter sections or a number 
of lots that approximate two contiguous quarter sections and 
consisting of 320 acres more or less. 

(7) Unless a special exception is granted after notice and 
hearing, no oil well with a projected depth of 6,000 feet or 
less shall be located closer than 330 feet to any legal subdivi- 
sion line, and only one well shall be permitted to produce from 
the same reservoir within the same legal subdivision. 

(8) No oil well with a projected depth between 6,000 feet 
and 11,000 feet shall be located closer than 660 feet to any 
governmental quarter section line, and only one well shall be 
permitted to produce from the same reservoir within the same 
governmental quarter section. 

(9) Before the drilling of any oil well with a projected 
depth greater than 11,000 feet may be commenced, two contiguous 
governmental quarter sections (which may lie in either one or 
two governmental sections) shall be designated as the 320-acre 
drilling unit for such well. Such designation shall be made by 
the operator or operators of the two governmental quarter 
sections described in the designation, and the designation shall 
be subject to administrative approval by the board. 

(10) An oil well with a projected depth greater than 11,000 
feet shall be located no closer than 660 feet to any governmen- 
tal section or quarter section line which is an exterior 
boundary of the 320-acre drilling unit and only one well shall 
be permitted to produce from the same reservoir within the same 
320-acre drilling unit. 

(11) Unless a special exception is granted after notice of 
hearing, no gas well shall be located closer than 990 feet to 
any governmental section line, and only one well shall be 
permitted to produce from the same reservoir within the same 
governmental section. (History: 82-11-111 MCA; IMP, 82-11-124 
and 82-11-201 MCA, Eff. 12/31/72; AMD, 1982 MAR p. 1398, Eff. 
7/16/82 . ) 

3 6.22.7 03 HORIZONTAL WELLS (1) Unless otherwise modified 
herein, the requirements of ARM 36.22.702 shall apply to hori- 
zontal wells. 

(2) For the purpose of determining the size of drilling 
units and the permissible location of horizontal wells, "pro- 
jected depth" as used in ARM 36.22.702 means the projected true 
vertical depth of the deepest horizontal drainhole. 



36-4902 9/30/95 ADMINISTRATIVE RULES OF MONTANA 



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OIL AND GAS CONSERVATION 36.22.703 

(3) A horizontal well meets the location requirements of 
ARM 36.22.702 if the point where the well bore first penetrates 
the common source of supply, the horizontal drainhole end point, 
and every part of the well bore lying between these points meet 
the minimum distance requirements from the drilling unit 
boundaries that would apply to a vertical well of the same 
projected depth, regardless of the surface location proposed. 

(4) The operator of a horizontal well may designate an 
optional drilling unit, which must consist of two, three, or 
four contiguous drilling units of the size and shape otherwise 
authorized for a vertical well of the same projected depth. The 
operator must receive administrative approval of the optional 
drilling unit before starting to drill the horizontal drainhole. 
Minimum distance requirements from drilling unit boundaries that 
would apply to the contiguous drilling units apply to the 
optional drilling unit, except that such requirements do not 
apply to the common boundary of the contiguous units. Any 
operator designating an optional drilling unit under this 
section must apply for proper well spacing within 90 days after 
the completion of a well capable of production. 

(5) Within 30 days after completion of a horizontal well, 
the operator must file with the board a complete and accurate 
directional survey showing the location, direction, and length 
of each horizontal drainhole and demonstrating that all drainho- 
les are at locations permitted by this rule or by a board 
location exception order. 

(6) In those cases where a horizontal well is drilled 
following an initial vertical penetration of the target horizon, 
or the horizontal well includes more than one horizontal 
drainhole, the completion report submitted under ARM 36.22.1011 
must adequately describe each well path. (History: Sec. 82-11- 
111 MCA; IMP, Sec. 82-11-124 and 82-11-201 MCA; NEW, 1992 MAR p. 
654, Eff. 4/1/92; AMD, 1995 MAR p. 285, Eff. 2/24/95.) 

Sub-Chapters 8 and 9 Reserved 



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ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4903 



OIL AND GAS CONSERVATION 36.22.1002 
Sub-Chapter 10 

Drilling 

36.22.1001 ROTARY DRILLING PROCEDURE Unless altered, 
modified, or changed by the board for particular common sources 
of supply, the following rules apply to drilling wells with 
rotary tools. 

(1) Suitable and safe surface casing must be used in all 
wells. Sufficient surface casing must be run to reach a depth 
below all fresh water located at levels reasonably accessible 
for agricultural and domestic use. Surface casing must be set 
in or through an impervious formation and must be cemented by 
the pump- and-plug or displacement method with sufficient cement 
to circulate to the top of the well. If it becomes necessary to 
run a production string, such string must be cemented by the 
pump-and-plug method or any other method approved by the board 
administrator and must be properly tested by the pressure method 
before cement plugs are drilled. 

(2) All cemented casing strings shall stand under pressure 
until the cement has reached a compressive strength of 300 
pounds per square inch; provided, however, that no tests shall 
be commenced until the cement has been in place for at least 8 
hours. The requirement "under pressure" as used herein will be 
complied with if one float valve is used or if pressure is 
otherwise held. 

(3) Blowout prevention equipment must be installed and 
maintained on all wells in accordance with the requirements of 
ARM 36.22.1014. 

(4) Freshwater-based drilling fluid or air must be used 
when drilling the surface hole prior to setting surface casing 
and when drilling through freshwater aquifers anywhere within 
the state of Montana. (History: 82-11-111, MCA; IMP, 82-11-123 
and 82-11-124, MCA; Eff. 12/31/72; AMD, Eff. 7/5/75; AMD, 1982 
MAR p. 1205, Eff. 6/18/82; AMD, 1982 MAR p. 1398, Eff. 7/16/82; 
AMD, 1992 MAR p. 654, Eff. 4/1/92.) 

36.22.1002 CABLE DRILLING PROCEDURE (1) Before commencing 
to drill a well, the operator must construct proper and adequate 
slush pits according to the plan in the application for permit 
to drill approved by the board. 

(2) If cable tools are used, sufficient casing must be set 
to protect all fresh water located at levels reasonably accessi- 
ble for agricultural and domestic use, and, before drilling 
below the casing point proceeds, such casing must be tested by 
bailing to ensure a shutoff. 

(3) Natural gas that may be encountered in a substantial 
quantity in any section of a cable-tool-drilled hole above the 
ultimate objective must be shut off with reasonable diligence 
and confined to its original source. Any gas escaping from the 

ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4933 



36.22.1003 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

well during drilling operations must be conducted a safe 
distance from the well site. 

(4) A casing program adopted for cable-tool-drilled wells 
must be so planned as to protect any potential oil- or gas- 
bearing horizons penetrated during drilling from infiltration of 
injurious waters from other horizons, to prevent the migration 
of oil or gas from one horizon to another, and to prevent 
migration of oil, salt water, or other contaminants into 
freshwater aquifers. 

(5) Freshwater-based drilling fluid must be used when 
drilling the surface hole prior to setting surface casing and 
when drilling through freshwater aquifers anywhere within the 
state of Montana. (History: 82-11-111, MCA; IMP, 82-11-123 and 
82-11-124, MCA; Eff . 12/31/72; AMD, Eff . 7/5/75; AMD 1982 MAR p. 
1205, Eff. 6/18/82; AMD, 1982 MAR p. 1398, Eff. 7/16/82; AMD, 
1992 MAR-p. 654, Eff. 4/1/92.) 

3 6.22.1003 VERTICAL DRILLING REOUIRED - DEVIATION 

(1) All wells shall be so drilled that the horizontal 
distance between the bottom of the hole and the location at the 
top of the hole shall be at all times at a practical minimum 
unless authorization for controlled directional drilling has 
been obtained.- 

(2) Before beginning controlled directional drilling, 
except for the purpose of straightening the hole, sidetracking 
junk, or correcting mechanical difficulties, where the intent is 
to direct the bottom of the hole away from the vertical, notice 
of the intention to do so shall be filed with the board on Form 
No. 2 and administrative approval obtained. Such notice shall 
state clearly the depth, exact surface location of the well 
bore, proposed direction of deviation, and proposed horizontal 
distance between the bottom of the hole and the surface loca- 
tion. If approval is obtained, the owner shall file with the 
board within 3 days after the completion of the work an 
accurate and complete copy of the survey made. Administrative 
approval for controlled directional drilling is not available 
where the proposed bottomhole location is not in compliance with 
applicable field or statewide well locations rules. (History: 
82-11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; Eff. 12/31/ 
72; AMD, 1982 MAR p. 1398, Eff. 7/16/82.) 

36.22.1004 DUAL COMPLETION OF WELLS (1) No well may be 
dually completed or dually recompleted without first notifying 
the board on Form No. 2 and each offset operator in writing at 
least 10 days prior to the commencement of such completion or 
recompletion operation, and without approval of the petroleum 
engineer or his authorized agent obtained after such 10 days. 
If within such 10 days any offset operator files with the board 
a written protest to the proposal, the matter shall be 

36-4934 9/30/95 ADMINISTRATIVE RULES OF MONTANA 



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OIL AND GAS CONSERVATION 36.22.1005 

immediately set down for hearing after notice, and the well 
shall not be completed or recompleted until permitted by order 
of the board after such hearing (History: 82-11-111, MCA; IMP , 
82-11-123 and 82-11-124, MCA; Eff. 12/31/72; AMD, 1982 MAR p. 
1398, Eff. 7/16/82.) 

3 6.22.1005 DRILLING WASTE DISPOSAL AND SURFACE RESTORATION 

(1) The operator of a drilling well must contain and 
dispose of all solid waste and produced fluids that accumulate 
during drilling operations so as not to degrade surface water, 
groundwater, or cause harm to soils. Said waste and fluids must 
be disposed of in accordance with all applicable local, state 
and federal laws and regulations . 

(2) When a salt-based or oil-based drilling fluid is used 
to drill a well located within a floodplain, as defined by ARM 
36.15.101, or in irrigated cropland, drilling waste and produced 
fluids that accumulate during drilling operations must be 
disposed of off -site in a manner allowed by local, state, and 
federal laws and regulations unless an alternative on-site 
disposal method is approved in writing by the board administra- 
tor . 

(3) The operator of a drilling well must construct, close, 
and restore any reserve pits in a manner that will prevent harm 
to the soil and will not degrade surface waters ar groundwater. 
When a salt-based or oil-based drilling fluid is used, the 
reserve pit must be lined with a synthetic liner approved by the 
board administrator. 

(4) Within 10 days after the cessation of drilling or 
completion operations, all hydrocarbons must be removed from 
earthen pits used in association with drilling or completion 
operations or such pits must be fenced, screened, and netted. 
Such pits that contain water with more than 15,000 parts per 
million total dissolved solids or salt-based drilling fluids 
must be fenced within 90 days after the cessation of drilling 
and completion operations. 

(5) Earthen pits used in association with drilling and 
completion operations must not be used for the disposal of any 
additional fluids or materials after the cessation of drilling 
and completion operations. 

(6) All earthen pits used in association with drilling and 
completion operations must be closed and the surface restored 
according to board specifications within one year after the 
cessation of drilling operations. Upon written application by 
the operator, an exception to the one-year pit closure require- 
ment may be granted in writing by the board administrator upon 
a showing that : 

(a) no dumping or disposal of waste or fluids in the pit 
will occur; and 

(b) delayed closure of the pit will not present a risk of 
contamination to soils or water or a hazard to animals or 

ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4935 



36.22.1005 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

persons. (History: 82-11-111, MCA: IMP, 82-11-123 and 82-11- 
124, MCA; Eff . 12/31/72; AMD, Eff. 7/5/75; AMD, 1992 MAR p. 654, 
Eff . 4/1/92) . 

Rules 36.22.1006 through 36.22.1010 Reserved 



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36-4936 9/30/95 ADMINISTRATIVE RULES OF MONTANA 



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OIL AND GAS CONSERVATION 36.22.1013 

36.22.1011 WELL COMPLETION AND RECOMPLETION REPORTS 

(1) Within 30 days after the completion of a well drilled 
for oil or gas (except a wildcat or exploratory well), a 
completion report shall be filed with the board on Form No. 4. 

(2) Within 30 days after the completion of any repair, 
deepening, reconditioning, reperf orating, or recompletion, a 
detailed report of work done and results obtained shall be filed 
with the board on Form No. 2. (History: 82-11-111, MCA; IMP, 
82-11-123 and 82-11-124, MCA; Eff. 12/31/72; AMD, Eff. 7/5/75.) 

36.22.1012 SAMPLES OF CORES AND CUTTINGS (1) Any owner or 
operator drilling or deepening a well for oil or gas must 
deliver prepaid to the board at the office stipulated on the 
approved permit to drill a complete and representative sample of 
the core chips and a dry, washed set of cuttings within a period 
of 6 months after the completion or abandonment of such well. 

(2) A complete and representative sample of core chips and 
a dry, washed set of cuttings from a stratigraphic well must be 
delivered prepaid to the board at the office stipulated on the 
approved permit to drill within 3 years of the completion of the 
stratigraphic well. 

(3) The board may at its discretion relieve any owner or 
operator from the obligation to so deliver samples of core chips 
or cuttings. (History: 82-11-111, MCA IMP, 82-11-125, MCA; Eff. 
12/31/72; AMD, 1982 MAR p. 1398, Eff. 7/16/82; AMD, 1982 MAR p. 
2149, Eff. 12/17/82; MD, 1983 MAR p. 1195, Eff. 8/26/83; AMD, 
1992 MAR p. 654, Eff. 4/1/92.) 

36.22.1013 FILING OF COMPLETION REPORTS, WELL LOGS. 
ANALYSES. REPORTS, AND SURVEYS (1) The owner or operator must 
run an electrical, radioactivity, or similar petrophysical log 
or combination of logs sufficient to determine formation tops 
from total depth to the base of the surface casing unless waived 
by the board administrator. 

(2) Within 30 days after the completion, reworking, or 
abandonment of any well drilled to known productive horizons 
within a delineated field, the operator or owner must transmit 
to the board three copies of Form 4, four copies of Form 2, and 
two copies of all well logs; drill stem test survey reports; 
sample and core description logs, analyses, reports, water 
analyses; and all other logs, surveys, and reports run or made. 

(3) In the case of a wildcat or exploratory well, the owner 
or operator must transmit to the board within 6 months after 
completion or abandonment three copies of Form 4, four copies of 
Form 2 and two copies of all logs, surveys, reports, and 
analyses run or made as described in subsection (2). In the 
case of a stratigraphic well, said information must be sent to 
the board within three years from the date of completion. 



ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4939 



36.22.1014 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(History: 82-11-111, MCA; IMP, 82-11-123, MCA; Eff. 12/31/72; 
AMD . 1982 MAR p. 1398, Eff. 7/16/82; AMD, 1982 MAR p. 2149, Eff. 
12/17/82; AMD, 1983 MAR p. 1195, Eff. 8/26/83; AMD, 1992 MAR p. 
654, Eff. 4/1/92.) 

36.22.1014 BLOWOUT PREVENTION AND WELL CONTROL EQUIPMENT 

(1) Unless otherwise provided for by the permit to drill 
issued under ARM 36.22.601 and ARM 36.22.602, or by board order 
issued after public notice and hearing, the owner must provide 
blowout preventers and well control equipment on all wells in 
accordance with the following rules. 

(a) For wells in areas of abnormal or unknown formation 
pressures, proper blowout preventers must consist of hydrauli- 
cally-operated single or double ram-type preventers with at 
least one pipe ram and one blind ram, and an annular-type 
preventer. Additional equipment must include upper and lower 
kelly cocks; mud pit level indicators with alarms and/or flow 
sensors and alarms; and choke manifolds, kill lines, and other 
well control equipment sufficient to handle all pressure kicks. 
Accumulators must maintain a pressure capacity reserve at all 
times to provide for the operation of the hydraulic preventers 
and valves with no outside source of pressure. 

(b) For development wells and in all areas of known 
formation pressures, blowout prevention and well control 
equipment must be installed. 

(c) The owner must maintain all blowout prevention and well 
control equipment in good working order. 

(2) Drilling spools for blowout preventer stacks must meet 
the following minimum specifications: 

(a) for working pressures rated at 3,000 or 5,000 pounds 
per square inch (psi), flanged, studded, or clamped side outlets 
of no less than 2 inches nominal diameter. 

(b) for working pressures rated at 10,000 and 15,000 psi, 
one 2-inch side outlet and one 3-inch side outlet. 

(3) The rated working pressure of all blowout preventers 
and well control equipment must equal or exceed the maximum 
anticipated pressure to be contained at the surface. 

(4) Wellhead outlets must not be used for choke or kill 
lines in areas of abnormal or unknown formation pressures. Such 
outlets may be employed for auxiliary or back-up connections to 
be used only if the primary control system fails. 

(5) The owner or operator must test blowout prevention and 
well control equipment according to the following standards. 

(a) Ram-type blowout preventers and well control equip- 
ment, including casing, must receive initial pressure testing to 
the least of the manufacturer's fullworking pressure rating of 
the equipment, 50 percent of the minimum internal yield pressure 
of any casing subject to test, or one psi per foot of the last 



36-4940 9/30/95 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 3 6.22.1014 

casing string depth. Annular- type blowout preventers must 
receive initial pressure testing in conformance with the 
manufacturer's published recommendations. 

(b) If, for any reason, a pressure seal is disassembled, 
the owner or operator must test the full working pressure of 
that seal before resuming drilling operations. However, if the 
affected seal is an integral part of the blowout preventer 
stack, the owner or operator may obtain permission from a board 
representative to proceed without testing the seal. 

(c) In addition to the initial pressure tests, the owner 
or operator must check ram- and annular-type preventers for 
physical operation each trip but not more than once each twenty- 
four (24) hour period. 

(d) All blowout preventer components, with the exception 
of annular preventers, must be tested monthly to the least of 50 
percent of the manufacturer's rated pressure, the maximum 
anticipated pressure to be contained at the surface, one psi per 
foot of the last casing string depth, or 70 percent of the 
minimum internal yield pressure of any casing subject to test. 

(e) The owner or operator must note all tests of blowout 
preventer and well control equipment on the driller's log, which 
must be made available to the board upon request. The board may 
require the operator or the drilling contractor to provide a 
signed and sworn affidavit attesting to the sufficiency of the 
blowout prevention equipment and any testing of such equipment. 

(6) The owner or operator must submit a schematic diagram 
of the proposed blowout prevention and well control equipment 
with the application for permit to drill. 

(7) In areas where hydrogen sulfide or sour gas may be 
encountered, the following additional equipment and precautions 
are required: 

(a) a blowout preventer closing unit located in a safe 
place easily accessible to rig personnel. 

(b) a remote auxiliary choke control panel to operate the 
choke manifold set up at a safe distance upwind from the rig 
floor . 

(c) a remote kill line sufficient to permit use of an 
auxiliary high-pressure pump. 

(d) the placement of the drilling fluid inlet line to the 
degasser close to the drilling fluid discharge line from the 
mud/gas separator. 

(e) provisions to flare toxic gases with an adequate 
degasser, discharge lines, check valves, a vertical flare stack, 
and a gas ignition system. 

(f) provisions for personnel training; personnel protec- 
tive equipment including sensors, alarms, and breathing equip- 
ment; warning signs; and wind direction flags to safeguard 
against injury or death. (History: 82-11-111, MCA; IMP, 82-11- 
121, 82-11-123 and 82-11-124, MCA; NEW, 1992 MAR p. 654, Eff. 
4/1/92. 

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ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4941 



# 



OIL AND GAS CONSERVATION 36.22.1103 

Sub-Chapter 11 
Safety 

36.22.1101 FIRE HAZARD PREVENTION (1) Any rubbish or 
debris that might constitute a fire hazard shall be removed to 
a distance of at least 150 feet from the well site, tanks, and 
reservoirs. All waste oil shall be burned or disposed of in a 
manner to avert creating a fire hazard. The owner shall take 
all available precautions to prevent any oil or gas well from 
blowing open and shall take immediate steps and exercise due 
diligence to bring under control any "wild" or burning oil or 
gas well. (History: 82-11-111, MCA; IMP, 82-11-123 and 82-11- 
124, MCA; Eff. 12/31/72; AMD, 1982 MAR p . 1398, Eff. 7/16/82.) 

36.22.1102 FIRE WALLS REQUIRED (1) When it is deemed 
necessary by the board to protect life, health, or property, the 
board may require any lease tanks or oil storage tanks to be 
surrounded by an earthen dike which shall have a capacity of 
1 1/2 times the capacity of the tank or tanks it surrounds and 
which dike shall be continually maintained; and the reservoir 
within shall be kept free from vegetation, water, or oil. 

(History: 82-11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; 
Eff. 12/31/72.) 

36.22.1103 NOTIFICATION AND REPORT OF EMERGENCIES AND 
UNDESIRABLE INCIDENTS (1) The owner or operator of a facility 
must give immediate notice by telephone to an authorized 
representative of the board and a written report to the board 
administrator within five working days of any of the following 
emergencies : 

(a) the spill, leak, or release of more than 50 barrels of 
oil or water containing more than 15,000 parts per million (ppm) 
total dissolved solids (TDS) ; 

(b) the spill, leak, or release of any amount of oil or of 
water containing more than 15,000 ppm TDS that enters surface 
water or groundwater; 

(c) the spill, leak, or release of any amount of produced 
water that degrades surface water or groundwater; 

(d) the release of any amount of gas with concentrations 
of 100 or more ppm hydrogen sulfide that is not immediately 
controlled; 

(e) any fire; and 

(f) any blowout. 

(2) The owner or operator must file a written report with 
the board administrator within five working days after any of 
the following: 

(a) the spill, leak, or release of ten (10) or more 
barrels of oil or water containing more than 15,000 ppm TDS that 

ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4961 



r 



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36.22.1104 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

is not completely contained within tank firewalls; and 

(b) the escape or release of over 3,000 MCF of gas. 

(3) The written and telephone reports referred to in parts 
(1) and (2) of this rule must include the following information: 

(a) the location of the facility involved in sufficient 
detail that the site of the emergency can be readily located on 
the ground; 

(b) an estimation of the quantity of oil, water or gas 
lost, destroyed, or permitted to escape; 

(c) steps that have been or will be taken to remedy the 
situation and the time schedule for each; and 

(d) any injuries or property damage. 

(4) The owner or operator must file with the board 
administrator any supplemental report that may be required by 
the board in connection with any individual emergency or 
undesirable incident. 

(5) The reporting required by this rule is in addition to 
all other reporting required by other applicable local, state, 
and federal laws and regulations. (History: 82-11-111, MCA; 
IMP . 82-11-123, MCA; Eff. 12/31/72; AMD, 1992 MAR p. 654, Eff. 
4/1/92. ) 

3 6.22.1104 CONTROL AND CLEANUP (1) The owner or operator 
must promptly control and clean up any leak, spill, escape, or 
discharge, regardless of the amount of oil, produced water, 
water containing more than 15,000 ppm TDS , or gas involved. 
(History: 82-11-111, MCA; IMP, 82-11-123, MCA; NEW . 1992 MAR p. 
654, Eff. 4/1/92.) 

36.22.1105 SOLID WASTE (1) Solid waste associated with 
oil and gas exploration or production activities must be 
disposed of according to all applicable local, state, and 
federal laws and regulations. (History: 82-11-111, MCA; IMP , 
82-11-123, MCA; NEW, 1992 MAR p . 654, Eff. 4/1/92.) 



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OIL AND GAS CONSERVATION 3 6.22.1207 

Sub-Chapter 12 
Production 

36.22.1201 SURFACE EOUIPMENT (1) Wellhead equipment shall 
be installed and maintained in satisfactory condition so that 
static bottom-hole pressures and operating gas-oil ratios may be 
obtained at any time. Valves shall be installed so that 
pressure can be readily obtained on both casing and tubing. 
However, exceptions may be granted by the petroleum engineer or 
his authorized agent when warranted by operating practices. 
(History: 82-11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; 
Eff. 12/31/72.) 

36.22.1202 IDENTIFICATION (1) The owner shall permanently 
mark all wells, producing properties, and tanks in a conspicuous 
place with his name, lease name, and, as to a well, number of 
the well and legal description of the well. (History: 82-11-111, 
MCA; IMP, 82-11-123, MCA; Eff. 12/31/72.) 

36.22.1203 CHOKES REQUIRED (1) All flowing oil wells shall 
be equipped with chokes or other adequate control equipment to 
insure proper and safe operations during normal production 
practices. (History: 82-11-111, MCA; IMP, 82-11-123 and 
82-11-124, MCA; Eff. 12/31/72.) 

36.22.1204 SEPARATORS REQUIRED (IS HEREBY REPEALED) 
(History: 82-11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; 
Eff. 12/31/72; REP, 1992 MAR p . 654, Eff. 4/1/92.) 

36.22.1205 VACUUM PUMPS PROHIBITED (1) The use of vacuum 
pumps for the purpose of putting a vacuum on any gas or oil- 
bearing stratum is prohibited; however, the board may upon 
application and for good cause shown permit the use of vacuum 
pumps. (History: 82-11-111, MCA; IMP, 82-11-124, MCA; Eff. 
12/31/72; AMD, 1982 MAR p . 1398, Eff. 7/16/82.) 

36.22.1206 TUBING REQUIRED (1) All flowing oil wells shall 
be equipped with and produced through tubing, unless the well is 
a dual completion. (History: 82-11-111, MCA; IMP, 82-11-123 and 
82-11-124, MCA; Eff. 12/31/72.) 

36.22.1207 EARTHEN PITS AND OPEN VESSELS (1) Waste oil, 
oil sludge, tank bottoms, merchantable oil, petroleum products, 
hazardous wastes, or hazardous or deleterious substances must 
not be stored, disposed of, or retained in earthen storage pits 
or in open vessels . 

(2) The owner or operator may make temporary use of an 
unlined earthen pit to retain oil or water in the event of an 
emergency or to retain fluids generated in recompletion or 

ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4981 



36.22.1208 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

workover operations. The oil, water, and contaminants must be 
removed from the emergency, recompletion or workover pit within 
forty-eight (48) hours and disposed of in a manner that will not 
degrade surface water or groundwater or cause harm to soils. An 
owner or operator must apply for and obtain a permit under ARM 
3 6.22.1227 to construct or operate a permanent emergency pit. 
Repeated use of an earthen pit or pits to contain oil or water 
spills from an improperly or inadequately designed or maintained 
production facility does not constitute an "emergency" for 
purposes of this rule. (History: 82-11-111, MCA; IMP , 82-11-123 
and 82-11-124, MCA; Eff. 12/31/72; AMD, 1992 MAR p. 654, Eff. 
4/1/92. ) 

36.22.1208 PRODUCING FROM DIFFERENT POOLS THROUGH THE 
SAME CASING No well drilled after January 1, 1954, shall be 
permitted to produce either oil or gas from different pools 
through the same string of casing without first receiving 
written permission from the board, which may require at the 
discretion of the board notice and hearing. (History: 82-11- 
111, MCA; IMP, 82-11-123 and 82-11-124, MCA; Eff. 12/31/72.) 

Rules 36.22.1209 through 36.22.1212 Reserved 



NEXT PAGE IS 36-4987 
36-4982 9/30/95 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.1215 

3 6.22.1213 RESERVOIR OR POOL SURVEYS (1) As directed by 
the board, surveys shall be made of the reservoirs or pools in 
this state containing oil and gas. These surveys shall be 
thorough and complete and shall be made by the operator or his 
agent under the supervision of agents of the board. The 
condition of the reservoirs or pools containing oil and gas, and 
the practices and methods employed by the operators shall be 
investigated. 

(2) The source of crude oil and natural gas, the pressure 
of the reservoir as an average, the areas of regional or 
differential pressure, stabilized gas-oil ratios and water-oil 
ratios, and the producing characteristics of the field as a 
whole and of the individual wells within the field shall be 
specifically included. 

(3) Provided, however, the board will accept from field 
engineering committees (petroleum engineering, geological, and 
statistical groups) or persons engaged in the petroleum industry 
in such an advisory capacity a periodic record of the physical 
behavior of the oil and gas reservoirs of Montana. These 
factual data shall be gathered and arranged in such fashion as 
to permit rapid evaluation by the board of the oil and gas 
recovery efficiency of the individual reservoir or pools. 
(History: 82-11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; 
Eff. 12/31/72; AMD, 1982 MAR p . 1398, Eff. 7/16/82.) 

36.22.1214 SUBSURFACE PRESSURE TESTS Within 3 days 
following the completion of each well in any pool whether such 
well produces oil or gas or both, the owner of such well shall 
make a subsurface pressure test on such well and shall report 
the results thereof to the board on Form No. 11 within 20 days 
after such test is made. Each such well shall remain completely 
shut in for at least 24 hours prior to the test. The subsurface 
determination shall be obtained as close as reasonably possible 
to the midpoint of the productive section of the reservoir. 
Further, the board will require periodic subsurface pressure 
measurements on a sufficient number of wells in any pool to 
provide adequate data for establishing maximum efficient rates 
of production (M.E.R.). (History: 82-11-111, MCA; IMP, 82-11- 
123 and 82-11-124, MCA; Eff. 12/31/72.) 

36.22.1215 STABILIZED PRODUCTION TEST Within 60 days 
following the completion or recompletion of an oil well, the 
operator shall file with the board's petroleum engineer at its 
Billings office the results of a stabilized production test of 
at least 72 hours duration showing the average daily oil 
production and average daily gas production during the test 
period. (History: 82-11-111, MCA; IMP . 82-11-123 and 82-11- 
124, MCA; NEW, 1978 MAR p . 1425, Eff. 10/13/78.) 



ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4987 



OIL AND GAS CONSERVATION 36.22.1215 

36.22.1213 RESERVOIR OR POOL SURVEYS (1) As directed by 
the board, surveys shall be made of the reservoirs or pools in 
this state containing oil and gas. These surveys shall be 
thorough and complete and shall be made by the operator or his 
agent under the supervision of agents of the board. The 
condition of the reservoirs or pools containing oil and gas, and 
the practices and methods employed by the operators shall be 
investigated. 

(2) The source of crude oil and natural gas, the pressure 
of the reservoir as an average, the areas of regional or 
differential pressure, stabilized gas-oil ratios and water-oil 
ratios, and the producing characteristics of the field as a 
whole and of the individual wells within the field shall be 
specifically included. 

(3) Provided, however, the board will accept from field 
engineering committees (petroleum engineering, geological, and 
statistical groups) or persons engaged in the petroleum industry 
in such an advisory capacity a periodic record of the physical 
behavior of the oil and gas reservoirs of Montana. These 
factual data shall be gathered and arranged in such fashion as 
to permit rapid evaluation by the board of the oil and gas 
recovery efficiency of the individual reservoir or pools. 
(History: 82-11-111, MCA; IMP . 82-11-123 and 82-11-124, MCA; 
Eff. 12/31/72; AMD, 1982 MAR p. 1398, Eff. 7/16/82.) 

3 6.22.1214 SUBSURFACE PRESSURE TESTS Within 3 days 
following the completion of each well in any pool whether such 
well produces oil or gas or both, the owner of such well shall 
make a subsurface pressure test on such well and shall report 
the results thereof to the board on Form No. 11 within 20 days 
after such test is made. Each such well shall remain completely 
shut in for at least 24 hours prior to the test. The subsurface 
determination shall be obtained as close as reasonably possible 
to the midpoint of the productive section of the reservoir. 
Further, the board will require periodic subsurface pressure 
measurements on a sufficient number of wells in any pool to 
provide adequate data for establishing maximum efficient rates 
of production (M.E.R.). (History: 82-11-111, MCA; IMP, 82-11- 
123 and 82-11-124, MCA; Eff. 12/31/72.) 

3 6.22.1215 STABILIZED PRODUCTION TEST Within 60 days 
following the completion or recompletion of an oil well, the 
operator shall file with the board's petroleum engineer at its 
Billings office the results of a stabilized production test of 
at least 72 hours duration showing the average daily oil 
production and average daily gas production during the test 
period. (History: 82-11-111, MCA; IMP, 82-11-123 and 82-11- 
124, MCA; NEW, 1978 MAR p. 1425, Eff. 10/13/78.) 



ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4987 



36.22.1216 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

36.22.1216 GAS-OIL RATIO TESTS Within 30 days following 
the completion and within 30 days following each recompletion of 
each well producing oil and either gas or casinghead gas or 
both, the owner of such well shall make a gas-oil ratio test of 
such well and the results of such test shall be reported to the 
board on Form No. 11 within 20 days after the test is made. 
Also, thereafter, each operator shall make a gas-oil ratio test 
at such other time or times as the board may hereafter desig- 
nate, and similarly report the results of each such test within 
the time specified. (History: 82-11-111, MCA; IMP , 82-11-123 
and 82-11-124, MCA; Eff. 12/31/72.) 

36.22.1217 WATER PRODUCTION REPORT The owner of each 
well which produces both oil and water shall separately deter- 
mine the amount of water produced along with the oil each month 
and shall each month report to the board the quantity of such 
water produced along with the oil. Such report shall be made on 
Form No. 6 by the last day of the succeeding month. (History: 
82-11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; Eff. 12/31/ 
72; AMD, 1984 MAR p. 931, Eff. 6/15/84.) 

36.22.1218 GAS TO BE METERED All gas when produced and 
sold shall be metered and reported to the board at 14.73 PSIA at 
60° Fahrenheit, unless otherwise permitted by the board. 
(History: 82-11-111, MCA; IMP, 82-11-123, MCA; Eff. 12/31/72; 

AMD . 1982 MAR p. 1398, Eff. 7/16/82.) 

36.22.1219 GAS WASTE PROHIBITED After completion of a gas 

well, no gas shall be permitted to escape into the air, except 

that required for periodic testing or cleaning of the well bore. 

(History: 82-11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; 

Eff. 12/31/72.) 

3 6.22.1220 ASSOCIATED GAS FLARING LIMITATION - APPLICATION 
TO EXCEED - BOARD REVIEW AND ACTION (1) If the average daily 
gas production exceeds 100 MCFG and the operator intends to 
flare or otherwise waste the associated gas, the well may not 
produce more than an average of 100 MCFG per day each calendar 
month after the 60 day test required by Rule 36.22.1215 until 
such time as further relief may be granted by the board pursuant 
to subsections (2) and (3). 

(2) If the operator wishes to flare more than an average of 
100 MCFG per day each calendar month, the operator must submit 
with the production test results a statement justifying the need 
to flare or otherwise waste more than that amount. 



36-4988 9/30/95 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 3 6.22.1222 

The statement should include such information as a gas analysis, 
estimated gas reserves, proximity of the well to a market, 
estimated gas price at the nearest market, estimated cost of 
marketing the gas, reinjection potential or other conservation- 
oriented disposition alternatives, amount of gas used in lease 
operations, and any other information pertinent to a determina- 
tion of whether marketing or not marketing or otherwise conserv- 
ing the associated gas is economically feasible. 

(3) The petroleum engineer will review the justification 
statement with the board at its next regularly scheduled 
meeting. The board may elect to: 

(a) docket a hearing for the operator to show further cause 
why it should be allowed to flare or otherwise waste more than 
an average of 100 MCFG per day each calendar month; 

(b) restrict production until the gas is marketed or 
otherwise beneficially utilized; in which case the operator may 
docket a hearing on his own behalf to seek further relief; or 

(c) take any other action the board deems appropriate in 
the circumstances. (History: 82-11-111, MCA; IMP . 82-11-123 
and 82-11-124, MCA; NEW, 1978 MAR p. 1425, Eff. 10/13/78; AMD . 
1982 MAR p. 1398, Eff. 7/16/82.) 

3 6.22.1221 BURNING OF WASTE GAS REQUIRED (1) All gas 
vented to the atmosphere at a rate exceeding 2 MCF per day for 
a period in excess of 72 hours shall be burned. All operators 
of wells venting any quantity of gas containing 20 parts per 
million or more of HjS shall insure that workable ignitor systems 
are installed on such wells and take whatever other steps that 
may be necessary to insure that all such waste gas is burned and 
not vented to the atmosphere. No variance from this rule is 
allowed without written authorization of the board. 

(2) Any operator seeking a variance from this rule must 
submit a production test and a statement justifying the need for 
a variance. The statement should include such information as 
potential human exposure; relative isolation of location; 
restriction of access to location such as fence, warning signs, 
etc.; low gas volume; and low BTU content. 

(3) The board staff will review the justification statement 
with the board at its next regularly scheduled hearing. The 
board may elect to grant or deny the application or schedule a 
hearing thereon. An operator whose application for variance is 
denied without a hearing may request a hearing. (History: 
82-11-111, MCA; IMP . 82-11-123, MCA; NEW . 1984 MAR p. 1042, Eff. 
7/13/84. ) 

3 6.22.1222 HYDROGEN SULFIDE GAS (1) The owner or operator 
of an oil or gas well drilled after the effective date of this 
rule that produces more than 2 MCF of gas per day containing 
more than 20 parts per million hydrogen sulfide must submit a 

ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4989 



36.22.1223 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

hydrogen sulfide gas report to the board with Form 4 after the 
completion of the well . 

(2) The owner or operator of an oil or gas well drilled 
and completed prior to the effective date of this rule that 
produces more than 20 MCF of gas per day containing more than 20 
parts per million hydrogen sulfide must submit a hydrogen 
sulfide gas report with Form 2 within 12 months after the 
effective date of this rule. 

(3) When more than one well produces casinghead gas into 
a common production facility, the hydrogen sulfide gas report 
required by subsections (1) and (2) of this rule may be submit- 
ted for the facility in lieu of the submission of a report for 
each well that produces into the facility. 

The hydrogen sulfide gas report required under this 

include the following information: 

the name and location of the well{s); 

the name and address of the operator or owner of the 



(4) 


rule must 


(a) 


(b) 


well (s) ; 


(c) 


producing 


(d) 


tion of 



the name(s) and depth (s) of the hydrogen-sul fide- 
geologic formation (s) ; and 

a gas analysis that indicates the percent concentra- 
methane, hydrogen sulfide, carbon dioxide, ethane, 
butane/pentanes , and other constituents. 

(5) The owner or operator of a production facility with 
the potential of accumulating hydrogen sulfide gas in concentra- 
tions of 100 parts per million or more must take measures to 
restrict and warn against access to the facility and must 
install a wind sock and hydrogen sulfide warning signs at such 
facility. (History: 82-11-111, MCA; IMP, 82-11-123 and 82-11- 
124, MCA; NEW . 1992 MAR p. 654, Ef f . 4/1/92.) 

36.22.1223 FENCING. SCREENING, AND NETTING OF PITS 

(1) Open storage vessels, earthen pits, or ponds that 
contain oil must be fenced, screened, and netted. 

(2) Open receptacles, earthen pits, or ponds that contain 
produced water with more than 15,000 parts per million total 
dissolved solids must be fenced. 

(3) This rule does not apply to earthen pits used solely 
for the purpose of drilling, completing, recompleting, working 
over, or plugging a well. (History: 82-11-111, MCA; IMP, 82- 
11-123 and 82-11-124, MCA; NEW, 1992 MAR p. 654, Eff. 4/1/92.) 

Rules 36.22.1224 and 36.22.1225 Reserved 



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36-4990 9/30/95 ADMINISTRATIVE RULES OF MONTANA 



t 



OIL AND GAS CONSERVATION 3 6.22.1227 

36.22.1226 DISPOSAL OF WATER (1) Produced water 
containing 15,000 parts per million (ppm) or less total 
dissolved solids (TDS) may be retained and disposed of in any 
manner allowed by law that does not degrade surface waters or 
groundwater or cause harm to soils. 

(2) Produced water containing more than 15,000 ppm TDS 
must be disposed: 

(a) by injection into an approved Class II injection well; 
or, 

(b) into board-approved lined or unlined earthen pits if the 
operator can show on permit application Form 23 that the volume 
of water to be disposed of per pit will not exceed five (5) 
barrels per day on a monthly basis and the produced water will 
not degrade any existing surface water or groundwater source or 
cause harm to soils. 

(3) Produced water containing more than 15,000 ppm TDS may 
be temporarily retained in storage tanks or board-approved, 
lined earthen pits or ponds prior to injection. The earthen 
pits or ponds must be constructed and maintained in accordance 
with ARM 36.22.1227. 

(4) Discharges of produced water must be in compliance with 
all applicable local, state, and federal water quality laws and 
regulations. (History: 82-11-111, MCA; IMP , 82-11-123 and 
82-11-124, MCA; Eff. 12/31/72; AMD, 1992 MAR p. 654, Eff. 
4/1/92. ) 

36.22.1227 EARTHEN PITS AND PONDS (1) No person shall 
construct or use an earthen pit or pond in association with a 
production facility without first obtaining a permit from the 
board. Such earthen pits or ponds that exist prior to the 
effective date of this rule must be permitted or closed and 
restored according to board specifications within 12 months 
after the effective date of this rule. 

(2) Earthen pits or ponds that receive produced water 
containing more than 15,000 parts per million (ppm) total 
dissolved solids (TDS) in volumes greater than five (5) barrels 
per day on a monthly basis must: 

(a) be constructed in cut material or at least 50 percent 
below original ground level; 

(b) be lined with an impermeable synthetic liner, or, if 
the bottom of the pit or pond is underlain by porous, permeable, 
sharp, or jagged material, the pit or pond must be lined with at 
least 3 inches of compacted bentonite prior to setting the 
impermeable synthetic liner; 

(c) be constructed above the high water table; 

(d) not be located in a floodplain as defined by ARM 
36.15.101, or in irrigated cropland; 

(e) be bermed or diked and have at least 3 feet of 
freeboard at all times between the surface of the water and the 
top of the banks, berms, or dikes of the pit or pond; 

ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4993 



36.22.1228 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(f) be fenced, screened, and netted in accordance with ARM 
36.22.1223; and 

(g) not be used for disposal of hazardous wastes or 
hazardous or deleterious substances. 

(3) The board administrator may impose more restrictive 
earthen pit or pond construction or operation requirements as 
may be necessary to prevent degradation of water or harm to 
soils . 

(4) Sections (2) (a) through (2) (f ) of this rule do not 
apply to emergency pits as allowed by ARM 36.22.1207, nor does 
this rule apply to temporary earthen pits, including reserve 
pits, approved by the board under a valid permit to drill unless 
such pits remain open and unrestored for more than 12 months 
after the cessation of drilling or completion operations. 
(History: 82-11-111, MCA; IMP . 82-11-123 and 82-11-124, MCA; 
Eff. 12/31/72; AMD, 1992 MAR p. 654, Eff. 4/1/92.) 

36.22.1228 DISPOSAL BY INJECTION (IS HEREBY REPEALED) 
(History: 82-11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; 

Eff. 12/31/72; REP, 1997 MAR p . 1589, Eff. 9/9/97.) 

36.22.1229 WATER INJECTION AND GAS REPRESSURING ( 1 ) The 
owner or operator of any well may inject water or gas under 
pressure into a formation containing oil or gas for the purpose 
of obtaining oil or gas from the reservoir upon application, 
hearing, and approval by the board. 

(2) Wells used for the injection of water or gas into a 
producing formation shall be cased with sound casing so as not 
to permit leakage, and the casing cemented in such manner as to 
protect oil, gas, or fresh water reservoirs. (History: 82- 
11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; Eff. 12/31/72.) 

36.22.1230 APPLICATION - CONTENTS AND REOUIREMENTS (IS 
HEREBY REPEALED) (History: 82-11-111, MCA; IMP , 82-11-123 and 
Sec. 82-11-124, MCA; Eff. 12/31/72; REP, 1997 MAR p. 1589, Eff. 
9/9/97. ) 

36.22.1231 NOTICE OF APPLICATION - OBJECTIONS (1) Notice 
of application for enhanced recovery or gas repressuring shall 
be given by the applicant by mailing or delivering a copy of the 
application to each operator of drilling or producing wells or 
of wells which have produced within one-half mile radius of the 
proposed input well or wells. Such notice shall be mailed or 
delivered on or before the application is mailed to or filed 
with the board. 

(2) Objections or complaints stating the reasons why the 
proposed plan as contained in the application may cause damage 
to oil, gas, or fresh water reservoirs must be filed within 10 

36-4994 9/30/97 ADMINISTRATIVE RULES OF MONTANA 



t 



OIL AND GAS CONSERVATION 3 6.22.1234 

days after the application is filed. (History: 82-11-111, MCA; 
IMP . 82-11-123 and 82-11-124, MCA; Eff. 12/31/72; AMD . 1997 MAR 
p. 1589, Eff. 9/9/97.) 

36.22.1232 BOARD AUTHORIZATION (1) No water flood or gas 
injection program shall be instituted until the same has been 
regularly authorized by the board. 

(2) The board will make such special orders and rules for 
the individual case as the conditions may justify. (History: 
82-11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; Eff. 
12/31/72. ) 

36.22.1233 NOTICE OF COMMENCEMENT OF DISCONTINUANCE- 
PLUGGING OF ABANDONED WELLS (IS HEREBY REPEALED) (History: 
82-11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; Eff. 
12/31/72; REP, 1997 MAR p . 1589, Eff. 9/9/97.) 

36.22.1234 RECORDS REOUIRED (IS HEREBY REPEALED) (History: 
82-11-111, MCA; IMP, 82-11-123 and 82-11-124, MCA; Eff. 
12/31/72; REP, 1997 MAR p . 1589, Eff. 9/9/97.) 

Rules 36.22.1235 through 36.22.1239 reserved 



NEXT PAGE IS 36-4999 
ADMINISTRATIVE RULES OF MONTANA 9/30/97 36-4995 



OIL AND GAS CONSERVATION 36.22.1242 

36.22.1240 REPORT OF WELL STATUS CHANGE (1) The owner or 
operator of any oil, gas, service, or injection well must report 
the change in status of such well from active to inactive or 
from producing to non-producing. Said owner or operator must 
report the return of a well to active or producing status if 
such well was idle for six (6) or more consecutive months. If 
the owner or operator expects that the well will be returned to 
an active or producing status within six (6) months of the date 
idled, filing of the report may be deferred until the end of 
such six (6) month period, and the report need not be filed if 
the well is returned to service during that period. Such 
reports are due within thirty (30) days of the date of status 
change or within thirty (30) days after the end of the deferred 
reporting period, and must be submitted on Form No. 2. Well 
status reports shall include the date of and reason for the well 
status change. A report describing a change to inactive or non- 
producing status must outline the operator's plan and a time 
frame for returning the well to active or producing status, 
plugging, or other intended action. (History: 82-11-111 MCA; 
IMP . 82-11-111, 82-11-121, 82-11-123, and 82-11-124 MCA; NEW . 
1993 MAR p. 152, Eff. 7/1/93.) 

36.22.1241 SERVICE COMPANY REPORTS (1) When a service 
company other than the drilling contractor cements, chemically 
treats, fractures, perforates, acidizes, plugs, or performs any 
act designed to change the productivity of a well or reservoir, 
the service company shall furnish the board at its district 
office reports concerning such work within 30 days after its 
completion. 

(2) When such operations as set forth in subsection (1) are 
performed on wildcat or exploratory wells, service company 
reports need not be submitted to the board for a period of 6 
months following completion of the well, and in such instances 
the responsibility of submitting such reports shall be that of 
the operator of the well, except that all service company 
reports covering all cementing operations other than squeezing 
must be submitted to the board at its district office within 30 
days after the work is performed. (History: 82-11-111 MCA; 
IMP . 82-11-124 MCA; Eff. 12/31/72; AMD, 1992 MAR p. 654, Eff. 
4/1/92. ) 

36.22.1242 REPORTS BY PRODUCERS - TAX REPORT - TAX RATE 
(1) Each owner or operator of an oil or gas well, or any 

other well (except an injection well reported on Form No. 5), 
shall file or cause to be filed with the board on or before the 
last day of each month following the month being reported a 
report on Form No. 6 containing all information required by said 
form and accurately reporting the status of each well thereon as 
of the last day of the month reported. 



ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-4999 



36.22.1242 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(2) The privilege and license tax on each barrel of crude 
petroleum and each 10,000 cubic feet of natural gas produced, 
saved, and marketed, or stored within the state or exported 
therefrom shall be 100 per cent of the rate authorized in 82-11- 
131, MCA, (3/lOths of 1%) of the market value thereof. This 
rule is effective on all crude petroleum and natural gas 
produced on and after July 1, 1995. (History: 82-11-111, MCA, 
IMP . 82-11-123, 82-11-131, and 82-11-133, MCA; Eff. 12/31/72; 
AMD . 1982 MAR p. 1398, Eff. 7/16/82; AMD, 1982 MAR p. 2149, Eff. 
12/17/82; Mm, 1983 MAR p. 1195, Eff. 8/26/83; AMD, 1986 MAR p. 
1384, Eff. 8/15/86; AMD, 1992 MAR p. 654, Eff. 4/1/92; AMD, 1993 
MAR p. 152, Eff. 7/1/94; AMD, 1995 MAR p. 1055, Eff. 6/16/95.) 

36.22.1243 REPORTS FROM TRANSPORTERS . REFINERS, PURCHASERS 
AND GASOLINE OR EXTRACTION PLANTS (1) All transporters of 
crude oil shall make monthly reports to the board on Form No. 7. 
All refiners of crude oil shall make monthly reports to the 
board on Form No. 8. All purchasers of gas shall make monthly 
reports to the board on Form No. 9. All operators of gasoline 
or other extraction plants shall make monthly reports to the 
board on Form No. 10. Such forms shall contain all information 
required therein and shall be filed with the board on or before 
the last day of each month covering the preceding month. 
(History: 82-11-111, MCA; IMP, 82-11-123, MCA; Eff. 12/31/72; 

AMD . 1984 MAR p. 931, Eff. 6/15/84; AMD, 2000 MAR p. 3542, Eff. 
12/22/00. ) 

36.22.1244 PRODUCER'S CERTIFICATE OF COMPLIANCE (1) A 
certificate of compliance for the transportation of oil and gas 
from a lease is required by the board to be filed on Form No. 13 
in accordance with instructions thereon. (History: 82-11-111, 
MCA; IMP, 82-11-123, MCA; Eff. 12/31/72; AMD, 1982 MAR p. 1398, 
Eff. 7/16/82.) 

36.22.1245 ILLEGAL PRODUCTION (1) No person shall produce 
any crude oil, natural gas, or waste oil from any spacing unit 
or pool in this state except in accordance with the rules and 
orders of the board. (History: 82-11-111, MCA; IMP, 82-11-148, 
MCA; Eff. 12/31/72.) 



NEXT PAGE IS 36-5021 
36-5000 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 3 6.22.1302 

Sub-Chapter 13 
Abandonment, Plugging, and Restoration 

36.22.1301 NOTICE AND APPROVAL OF INTENTION TO ABANDON 
REPORT (1) Before any work is commenced to abandon strati - 
graphic tests or any new well drilled in search of oil or gas, 
for salt water disposal, or for any otner purpose related to oil 
field operations in which no casing has been run, other than 
surface pipe, the owner thereof shall give oral notice to and 
obtain approval from the Petroleum engineer or his authorized 
agent prior to commencing plugging operations. The petroleum 
engineer may send an authorized agent to the location specified 
to witness the plugging operation. Within 15 days after final 
abandonment, the owner shall submit to the board on Form No. 2 
a subsequent report of abandonment setting forth in such report 
the terms and conditions of the plugging and abandonment as 
approved orally by the petroleum engineer or his authorized 
agent . 

(2) Before any work is commenced to abandon any well 
drilled in search of oil or gas, for salt water disposal, or for 
any other purpose related to oil field operations in which 
casing has been run, except surface pipe, the owner thereof 
shall give written notice to the board on Form No. 2 setting 
forth the method of plugging, the depths and number of plugs, 
and any other information required under ARM 36.22.1305 and 
36.22.1309. Upon approval of such notice by the petroleum 
engineer or his authorized agent, the owner may proceed with 
plugging and abandonment operations. The petroleum engineer may 
send an authorized agent to the location specified to witness 
the plugging operations. Within 15 days after final abandon- 
ment, the owner shall submit a subsequent report of abandonment 
as required by ARM 36.22.1309. (History: 82-11-111, MCA; IMP, 
82-11-123 and 82-11-124, MCA; Eff. 12/31/72.) 

36.22.1302 NOTICE OF ABANDONMENT The notice of abandonment 
required to be given to the surface owner by Section 82-10-401, 
MCA, shall be mailed to said surface owner or owners at their 
address as shown by the last completed assessment roll in the 
office of the County Assessor of the county in which the land is 
located. The notice shall be deemed complete when deposited in 
the U.S. mail with proper postage affixed. The regulation shall 
not be applicable to a dry hole drilled for any purpose whatso- 
ever as such situation is covered by other regulations of this 
board. (History: 82-10-401, MCA; IMP, 82-10-401, MCA; NEW, Eff. 
12/5/74.) 



ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-5021 



36.22.1303 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

36.22.1303 WELL PLUGGING REQUIREMENT (1) The owner shall 
not permit any well drilled for oil, gas, salt water disposal, 
or any other purpose to remain unplugged after such well is no 
longer useful for the purpose for which it was drilled or 
converted. When a well is no longer capable of production 
because the underlying reservoir or reservoirs are depleted and 
there is no possible future use for the well in supplemental 
recovery operations or for disposal facilities, the operator 
shall within one year plug and abandon the well as set forth in 
this sub-chapter, unless otherwise authorized by the petroleum 
engineer or his authorized agent. (History: 82-11-111, MCA; 
IMP . 82-11-123 and 82-11-124, MCA; Eff. 12/31/72; AMD, 1998 MAR 
p. 482, Eff. 2/13/98.) 

36.22.1304 PLUGGING METHODS AND PROCEDURE (1) All abandoned 
wells shall be marked with a permanent monument which shall 
consist of a piece of pipe not less than 4 inches in diameter 
and not less than 10 feet in length of which 4 feet shall be 
above the general ground level and the remainder shall be 
imbedded in cement or shall be welded to the surface casing. 
The top of the pipe must be sealed with a screw cap, cement 
plug, or other approved method. 

(2) The owner shall inscribe on the marker pipe by welding 
or other suitable method the name of the well, the location 
(quarter section, section, township, and range) , total depth, 
and elevation. 

(3) At the request of the surface owner of a lease on which 
a well is to be plugged, the requirement for a marker set forth 
above may be waived. In this event, a plug or seal shall be 
placed in the hole in such manner as not to interfere with soil 
cultivation or other surface use. (History: 82-11-111, MCA; 
IMP . 82-11-123 and 82-11-124, MCA; Eff. 12/31/72.) 

36.22.1305 EXCEPTION FOR FRESH WATER WELLS (1) When the 
well to be plugged, as required by ARM 36.22.1303, may safely be 
used as a fresh water well and such utilization is desired by 
the landowner, the well need not be filled above the required 
sealing plug set below fresh water; provided, that written 
notification of such utilization and a release by use of Form 
No. 19 is secured from the landowner and filed with the board. 

(2) Approval by the petroleum engineer or his authorized 
agent of the work done shall relieve the operator of further 



36-5022 3/31/98 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 3 6.22.1308 

responsibility. (History: 82-11-111, MCA; IMP, 82-11-123 and 
82-11-124, MCA; Eff. 12/31/72; AMD, 1984 MAR p. 931, Eff. 
6/15/84. ) 

36.22.1306 APPROVAL FOR PULLING CASING AND RE-ENTERING 
WELLS (1) No casing shall be pulled from any well regardless 
of its status without first filing Form No. 2 and securing 
approval of the petroleum engineer or his authorized agent. 

(2) No oil or gas well which has been plugged in accor- 
dance with these rules shall be reentered for any purpose 
without first filing Form No. 22 and securing approval of the 
petroleum engineer or his authorized agent. (History: 82-11- 
111, MCA; IMP, 82-11-123 and 82-11-124, MCA; Eff. 12/31/72; AMD . 
1988 MAR p. 1980, Eff. 8/30/88; AMD, 2000 MAR p. 3542, Eff. 
12/22/00. ) 

36.22.1307 RESTORATION OF SURFACE (1) The owner of any 
well drilled in search of oil and gas or for injection purposes 
or the driller of a stratigraphic test or core hole or 
seismographic shot hole shall, as soon as weather or ground 
conditions permit, upon the final abandonment and completion of 
the plugging of any well or after a seismographic shot hole has 
been utilized, restore the surface of the location to its 
previous grade and productive capability and take necessary 
measures to prevent adverse hydrological effects from such well 
or hole, unless the surface owner agrees in writing, with the 
approval of the board or its representative, to a different plan 
of restoration. (History: 82-11-111, MCA; IMP . 82-11-123, MCA; 
Eff. 12/31/72; AMD, Eff. 12/5/74; AMD, 1982 MAR p. 1398, Eff. 
7/16/82; AMD, 2000 MAR p. 3542, Eff. 12/22/00.) 

36.22.1308 PLUGGING AND RESTORATION BOND (1) Except as 
Otherwise provided in these rules, the following bonds are 
required for wells within the board's jurisdiction: 

(a) The owner or operator of a single well to be drilled, 
or of a single existing oil, gas, or Class II injection well to 
be acquired, must provide a one well bond: 

(i) in the sum of $1,500, where the permitted total depth 
of a drilling well, or the actual, or plugged-back, total depth 
of an existing well, is 2,000 feet or less; or 

(ii) in the sum of $5,000, where the permitted total depth 
of a drilling well, or the actual, or plugged-back, total depth 
of an existing well, is greater than 2,000 feet and less than 
3,501 feet; or 

(iii) in the sum of $10,000, where the permitted total depth 
of a drilling well, or the actual, or plugged-back, total depth 
of an existing well, is 3,501 feet or more. 



ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-5023 



36.22.1308 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(b) The owner or operator of multiple wells to be drilled, 
of existing wells to be acquired, or any combination thereof, 
must provide a multiple well bond in the sum of $50,000. A one- 
time consolidation of companies will not be considered an 
acquisition requiring a $50,000 bond if the consolidation does 
not change the party or parties responsible for the ultimate 
plugging of the wells and the resulting consolidated company 
provides a bond not less than the aggregate amount of the 
existing bonds covering wells prior to consolidation. 

(c) The owner or operator of existing wells covered by a 
multiple well bond in an amount less than $25,000 must provide 
a new bond or a supplemental bond or rider to an existing bond 
to increase coverage to $25,000. An operator may request a 
payment schedule of equal annual bond increases over a period 
not exceeding five years from the effective date of these rules. 
Such payment schedule may be approved administratively. 

(2) All bonds must be executed on board Form No. 3 or 
board Form No. 14, must be payable to the state of Montana, and 
must be conditioned for the performance of the duty to properly 
plug each dry or abandoned well, and to restore the surface of 
the location as required by board rules. 

(3) The board may require an increase by appropriate rider 
of any bond from $1,500 to $3,000, $5,000 to $10,000 or from 
$10,000 to $20,000 for a single well bond, and from $50,000 to 
$100,000 for a multiple well bond, when in the opinion of the 
board the factual situation warrants such an increase in order 
for any owner or operator to be in compliance with this rule. 
In addition to, or in lieu of, an increase in the bond amount as 
provided above, the board may limit the number of wells that may 
be covered by any multiple well bond. 

(4) No new or additional wells shall be added or substi- 
tuted to any bond existing prior to the effective date of this 
rule . 

(5) The bond referred to in this rule must be in one of 
the following forms: 

(a) a good and sufficient surety bond secured from a 
bonding company licensed to do business in the state of Montana; 

(b) a federally insured certificate of deposit issued and 
held by a Montana bank or any national bank in the United States 
that is federally insured and has total assets greater than $200 
million; or 

(c) a letter of credit issued by: 

(i) an FDIC-insured, Montana commercial bank; or 
(ii) an out-of-state FDIC-insured, commercial bank having 
assets in excess of $200 million. 

(6) A well must remain covered by a bond, and such bond 
must remain in full force and effect until: 



36-5024 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.1308 



(a) the plugging and restoration of the surface of the 
well is approved by the board; or 

(b) a new bond is filed by a successor in interest and 
such bond is approved by the board. 

(7) A notice of intent to change operator must be filed on 
Form No. 20 by a proposed new owner or operator of a well within 
30 days of the acquisition of the well. Said notice shall 
include all information required thereon and must contain the 
endorsement of both the transferor and the transferee. The 
board administrator may delay or deny any change of operator 
request if he determines that either the transferor or the 
transferee is not in substantial compliance with the board's 
statutes, rules, or orders. The board may require an increase 
in any bond up to the maximum amount specified in (3) of this 
rule as a condition of approval for any change of operator 
request. The transferor of a well is released from the 
responsibility of plugging and restoring the surface of the well 
under board rules after the transfer is approved by the board. 

(8) Where the owner of the surface of the land upon which 
one or more non-commercial wells have been drilled wishes to 
acquire a well for domestic purposes, the bond provided by the 
person who drilled or operated the well will be released if the 
surface of the location is restored as required by board rules, 
and if said surface owner furnishes: 

(a) proof of ownership of the surface of the land on which 
the well is located; and 

(b) for actual beneficial water uses of 35 gallons or less 
per minute, not to exceed ten acre-feet per year, a copy of the 
notice of completion of groundwater development (Water Rights 
Bureau Form 602) filed with the department of natural resources 
and conservation (DNRC) ; or 

(c) for actual beneficial water uses of more than 35 
gallons per minute, or in excess of 10 acre-feet per year, a 
copy of the beneficial water use permit (Water Rights Bureau 
Form 600) received from the DNRC; or 

(d) for a domestic gas well, a written and signed inspec- 
tion report from one of the board's field inspectors stating 
that the well is presently being beneficially used as a source 
of domestic natural gas; and 

(e) for a domestic gas well: 

(i) a federally insured certificate of deposit in the 
amount of $5,000 for a single well or in the amount of $10,000 
for more than one well; or 

(ii) a real property bond in the amount of two times the 
amount of the required federally insured certificate of deposit. 

(9) The real property bond required in (8) (e) (ii) above 
must be: 



ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-5025 



36.22.1309 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(a) provided on a board-approved form; and 

(b) accompanied by a certified real property appraisal and 
abstract of title which evidence unencumbered owner equity in an 
amount equal to or greater than the amount of the bond required. 

(10) A domestic well must be plugged, abandoned, and 
restored in accordance with ARM 36.22.1301 through 36.22.1304, 
36.22.1306, 36.22.1307, and 36.22.1309, or transferred to a 
bonded operator in accordance with (7) of this rule, after the 
well ceases to be used for domestic purposes. (History: 82-11- 
111, MCA; IMP . 82-11-123, MCA; Eff. 12/31/72; AMD . 1977 MAR p. 
549, Eff. 9/24/77; AMD, 1982 MAR p. 855, Eff. 4/30/82; AMD, 1982 
MAR p. 1398, Eff. 7/16/82; AMD . 1990 MAR p. 305, Eff. 2/9/90; 
AMD . 1993 MAR p. 152, Eff. 7/1/93; AMD . 1998 MAR p. 482, Eff. 
2/13/98; AMD, 1998 MAR p. 1745, Eff. 6/26/98; AMD, 2000 MAR p. 
3542, Eff. 12/22/00.) 

36.22.1309 SUBSEOUENT REPORT OF ABANDONMENT (1) Within 
15 days after the plugging of a well, the owner thereof shall 
file a subsequent report of abandonment with the board setting 
forth in detail the method used in plugging the well. Such 
report shall be made on Form No. 2 and shall give a detailed 
account of the manner in which the abandonment or plugging work 
was carried out, including: 

(a) the nature and quantity of materials used in plugging; 

(b) the location and extent (by depths) of the plugs of 
different materials; 

(c) records of any tests or measurements made; 

(d) the amount, size, and location (by depths) of casing 
left in the well; and 

(e) a statement of the volume of mud used. 

(2) If an attempt was made to part any casing, a complete 
report of the method used and the results obtained must be 
included. (History: 82-11-111, MCA; IMP, 82-11-123 and 82-11- 
124, MCA; Eff. 12/31/72.) 



NEXT PAGE IS 36-5045 
36-5026 6/30/98 ADMINISTRATIVE RULES OF MONTANA 



9 



OIL AND GAS CONSERVATION 36.22.1401 

Sub-Chapter 14 

Underground Injection Control 

36.22.1401 DEFINITIONS For the purposes of this sub-chap- 
ter the following are defined: 

(1) "Area of review" means the area surrounding an injec- 
tion well to a radius calculated according to the criteria set 
forth in ARM 36.22.1425 or a fixed radius of one quarter mile, 
or for an area project, the project area plus a radius calculat- 
ed according to the criteria set forth in ARM 36.22.1425, or the 
project area plus a circumscribing area the width of which is 
one quarter mile. 

(2) "Confining zone" means the geological formation or 
formations, or the portion of a formation that is capable of 
limiting fluid movement out of the injection zone. 

(3) "Corrective action" means the reworking, repair, re- 
plugging or other activity taken for the purposes of preventing 
migration of injected fluids into underground sources of drink- 
ing water through any existing wellbore that penetrates the 
injection zone within the area of review. 

(4) "Class II injection well" means a well that: 

(a) injects fluids brought to the surface in conjunction 
with conventional oil and gas production and may be commingled 
with waste waters from gas plants which are an integral part of 
production operations, unless those waters are classified as a 
hazardous waste at the time of injection; 

(b) is used to inject brines or other fluids brought to 
the surface in connection with oil or gas production or gas 
storage operations; 

(c) is used to inject brines or other fluids described in 
(4) (b) which, prior to injection, have been: 

(i) used on-site for purposes integrally associated with 
oil and gas production or storage; 

(ii) chemically treated or altered to the extent necessary 
to make them useable for purposes integrally related to oil and 
gas production or storage; or 

(iii) commingled with fluid wastes resulting from the treat- 
ment described in (4) (c) (ii),so long as they do not constitute 
a hazardous waste; 

(d) is used to inject fresh water (i.e., water containing 
less than 10,000 mg/L total dissolved solids) from groundwater 
or surface water sources, added to or substituted for the brine 
may also be injected, as long as the only use of the water is 
for purposes integrally associated with oil and gas production 
or storage; 

(e) is used to inject fluids for the enhanced recovery of 
oil or gas; 



ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-5045 



36.22.1401 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(f) is used to inject fluids for storage of hydrocarbons 
that are liquid under standard conditions of temperature and 
pressure; or 

(g) is used to inject exempt waste fluids associated with 
oil or natural gas exploration and production as long as their 
physical state allows it, including produced fluid, drilling 
fluids, drill cuttings, rigwash, well completion fluids, work- 
over wastes, gas plant dehydration wastes, gas plant sweetening 
wastes, spent filters and backwash, packing fluids, produced 
sand, production tank bottoms, gathering line pigging wastes, 
hydrocarbon-bearing soil, and waste crude oil from primary field 
sites . 

(5) "Class III well" means a well that injects for the 
extraction of minerals other than oil or gas including: 

(a) mining of sulfur; 

(b) in situ production of uranium or other metals other 
than by solution mining of conventional mines; 

(c) solution mining of salts or potash. 

(6) "EPA" means the United States environmental protection 
agency. 

(7) "Injection well, new" means a class II well that began 
injecting after the effective date of the UIC program delegation 
by the EPA. 

(8) "Injection well, existing" means an injection well 
other than a new injection well. 

(9) "Injection zone" means the geological formation, group 
of formations, or portion of a formation that receives the in- 
jected fluids through a well. 

(10) "Injected fluids" means any material or substance 
which flows or moves and is emplaced in an injection zone 
through a class II injection well. 

(11) "Mechanical integrity" means that: 

(a) there is no significant leak in the casing, tubing, or 
packer of the' injection well; and 

(b) there is no significant fluid movement into an under- 
ground source of drinking water (USDW) from the injection zone 
or from a non-USDW geologic stratum or zone of rock overlying 
the injection zone, or flow between adjacent USDW s through 
channels adjacent to the injection wellbore. 

(12) "Program director" means that employee of the Montana 
board of oil and gas conservation (board) designated by the 
board as the principal administrator of the Montana underground 
injection control program delegated by EPA. 

(13) "UIC" means underground injection control. 

(14) "Underground source of drinking water (USDW)" means an 
aquifer or portion thereof which supplies drinking water for 
human consumption, or an aquifer which contains fewer than 
10,000 mg/1 total dissolved solids and is not an exempt aquifer 
under ARM 36.22.1418. 

36-5046 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.1402 

(15) "Well" means a bored, drilled, or driven shaft, or a 
dug hole, whose depth is greater than the largest surface dimen- 
sion. 

(16) "Well injection" means the subsurface emplacement of 
fluids through a bored, drilled, or driven well; or through a 
dug well, where the depth of the dug well is greater than the 
largest surface dimension. 

(17) "Well plug" means a watertight and gastight seal 
installed in a borehole or well to prevent movement of fluids. 

(18) "Well stimulation" means several processes used to 
clean the wellbore, enlarge channels, and increase pore space in 
the interval to be injected thus making it possible for wastewa- 
ter to move more readily into the formation, and includes surg- 
ing, jetting, blasting, acidizing, and hydraulic fracturing. 

(19) "Well monitoring" means the measurement, by on-site 
instruments or laboratory methods, of the quality of water of a 
well. (History: 82-11-111, MCA; IMP, 82-11-111, 82-11-121, 82- 
11-123, 82-11-124, 82-11-127, and 82-11-137, MCA; NEW, 1992 MAR 
p. 2171 and 1996 MAR p. 1308, Eff. 5/10/96; AMD, 1996 MAR p. 
1308, Eff. 5/10/96; AMD, 1996 MAR p. 1308, Eff. 5/10/96; AMD . 
2000 MAR p. 3542, Eff. 12/22/00.) 

36.22.1402 UNDERGROUND INJECTION (1) No person shall 
commence a new injection project or construct or operate a new 
class II injection well, or convert an existing well to injec- 
tion, whether for the purpose of disposal, or as part of an 
enhanced recovery project, or for the storage of liquid hydro- 
carbons, without a permit from the board. 

(2) Existing injection wells operating under valid EPA- 
issued or rule authorized class II injection permits will be 
governed under the terms and conditions of such permits until 
permit expiration or plugging, whichever occurs first; provided, 
however, that no existing injection well may be operated in a 
manner inconsistent with the laws and rules of the board. 
(History: 82-11-111, MCA; IMP, 82-11-111, 82-11-121, 82-11-123, 
82-11-124, 82-11-127, and 82-11-137, MCA; NEW, 1992 MAR p. 2171 
and 1996 MAR p. 1308, Eff. 5/10/96; AMD, 1996 MAR p. 1308, Eff. 
5/10/96. ) 



NEXT PAGE IS 36-5049 
ADMINISTRATIVE RULES OF MONTANA 6/30/96 36-5047 



OIL AND GAS CONSERVATION 36.22.1403 

36.22.1403 APPLICATION CONTENTS AND REQUIREMENTS ( 1 ) The 
application for a class II injection permit must be filed with 
the board showing: 

(a) the location of the input well or wells; 

(b) the location and mechanical condition, of all oil and 
gas wells including abandoned and drilling wells, dry holes, and 
any other wells which penetrate the injection zone within the 
area of review; 

(c) the location of all pipelines which will be used to 
transport fluids to the input well for storage and injection; 

(d) the formations from which wells are producing or have 
produced, the formations, depth, and estimated water quality of 
the deepest potential underground sources of drinking water, and 
the location and depth of any water wells in the area of review; 

(e) the name, description, and depth of the injection 
zone(s) including a water analysis or other water quality 
information acceptable to the board, estimated formation 
pressure, and reservoir characteristics of the zone, and the 
name, lithologic characteristics, depth, and estimated fracture 
gradient of the confining zone; 

(f) the elevation of the top of the oil or gas bearing 
formation in the input well or wells and in the wells producing 
from the same formation within the area of review of the 
project; 

(g) the electric log of the input well or wells or other 
log or lithological information not already on file with the 
board; 

(h) a description of the input well or wells casing and 
cementing program (all new wells must be cased and cemented so 
that migration of fluids into or between USDW s is prevented); 

(i) a description and analysis of the injected fluids 
stating the kind, source, and the estimated amount to be 
injected daily, and the average and maximum anticipated injec- 
tion pressure; 

(j) the names and addresses of the leasehold owners, 
including unleased mineral owners, and the surface owners within 
the area of review of the input well(s) . 

(2) One application may be made for multiple class II 
injection wells in a geographic area if all wells within that 
geographic area have substantially the same mechanical and 
geologic characteristics and are operating in the same field, 
unit, or lease. Where appropriate, an application for under- 
ground injection of fluids on an area basis may include the 
information required in (1) of this rule for a typical class II 
injection well in lieu of submitting such information on all 
class II injection wells in the application provided such class 
II injection wells have substantially the same characteristics. 



ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-5049 



v^^ 



36.22.1403 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(3) If injected fluids will be collected and retained in 
pits, ponds, or other open receptacles prior to injection, the 
applicant must submit an application on form 23 for a permit to 
construct or operate a pit or pond when the application for 
water injection or disposal is filed with the board. All 
earthen reservoirs, pits, ponds, and open receptacles must 
comply with ARM 36.22.1207, 36.22.1226, and 36.22.1227. 
(History: 82-11-111, MCA; IMP, 82-11-111, 82-11-121, 82-11-123, 
82-11-124, 82-11-127, and 82-11-137, MCA; NEW, 1992 MAR p. 2171 
and 1996 MAR p. 1308, Eff. 5/10/96; AMD, 2000 MAR p. 3542, Eff . 
12/22/00. ) 

Rules 36.22.1404 and 36.22.1405 reserved 



NEXT PAGE IS 36-5055 
36-5050 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.1408 

36.22.1406 CORRECTIVE ACTION (1) It is the obligation of 
the applicant to demonstrate to the board's satisfaction that 
the existing wells that penetrate the injection zone within the 
area of review are in adequate mechanical condition to prevent 
migration of injected fluid into any USDW. The board will 
require the applicant to submit a plan for corrective action, 
including the reworking, repairing or re-plugging of any such 
well(s) the board considers to be a possible avenue for fluid 
migration. Injection must not commence until satisfactory 
completion of the work required in the approved corrective 
action plan. 

(2) The board may require that corrective action be taken 
if, after notice and hearing, it is shown that USDW s outside 
the area of review are threatened by an injection well or wells. 
(History: 82-11-111, MCA; IMP, 82-11-111, 82-11-121, 82-11-123, 
82-11-124, 82-11-127, and 82-11-137, MCA; NEW, 1992 MAR p. 2171 
and 1996 MAR p. 1308, Eff. 5/10/96.) 

36.22.1407 SIGNING THE APPLICATION (1) Applications must 
be signed (for a corporation) by a principal executive officer 
of at least the level of vice-president, or by an agent and 
attorney-in-fact; or, (for a sole proprietorship) by the sole 
proprietor; or, (for a partnership) by a general partner. If 
the application is submitted on behalf of a federal, state, or 
other public agency, or by a municipality, signature must be of 
a principal executive or a ranking elected official. The 
application may be signed by a duly authorized representative if 
the authorization is made in writing by one of the above 
described persons, and if the authorization either names an 
individual or specifies a position having responsibility for the 
operation of the project. The written authorization will be 
submitted to the board, and must be promptly replaced if the 
authorization no longer accurately describes the responsible 
position or person. Application for enhanced recovery projects 
must be signed by all operators who will participate in the 
proposed project, or by the unit operator if the request is part 
of a plan for unitized operation under 82-11-201, et seq. , MCA. 
Applications for disposal wells must be signed by the well 
operator. (History: 82-11-111, MCA; IMP, 82-11-111, 82-11-121, 
82-11-123, 82-11-124, 82-11-127, and 82-11-137, MCA; NEW, 1992 
MAR p. 2171 and 1996 MAR p. 1308, Eff. 5/10/96.) 

36.22.1408 FINANCIAL RESPONSIBILITY (1) The owner or 
operator of any injection well outside the exterior boundaries 
of Indian reservations must comply with the applicable bonding 
requirements of ARM 36.22.1308 and this sub-chapter. 

(2) Owners or operators of injection wells in compliance 
with the U.S. environmental protection agency (EPA) financial 
assurance requirements on the date primary enforcement authority 
is delegated to the board of oil and gas conservation must 

ADMINISTRATIVE RULES OF MONTANA 3/31/97 36-5055 



36.22.1408 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

provide a bond on board Form No. 3 or Form No. 14 in an amount 
equal to that provided to the EPA, unless an alternative multi- 
well bond is approved as provided in this rule. This bond is 
limited to wells covered under the EPA bond. The bond may be 
reduced to reflect the plugging or re-completion of wells to 
other approved use. The reduction will be in the proportion 
each plugged or re-completed well represents to the total bond 
amount at the time the bond was initially accepted. 

(3) Owners or operators proposing to drill or acquire 
additional injection wells must provide the individual well 
bonds described in ARM 36.22.1308(1) as appropriate for the 
depth of the well unless such additional well(s) are covered 
under a multiple well UIC bond as provided in this rule. The 
multiple well bond described in ARM 36.22.1308(1) (b) is not 
available for injection wells. 

(4) Injection well operators may propose an alternative 
multiple well UIC bond to the board's staff. The staff will 
review the proposed bond and provide a recommendation for its 
approval, modification, or rejection by the board at its next 
available scheduled meeting. In support of its request for a 
multi-well bond the operator may provide cost estimates for 
plugging and restoring the surface of wells of the type and in 
the area to be covered by the bond, the operator's estimate of 
any residual or salvage value that may reduce the costs of 
plugging, and any other information the operator wishes to 
provide. In reviewing a proposed bond, the staff must consider 
the reasonableness of the cost estimates provided, the compli- 
ance history of the operator, the operator's history of promptly 
plugging unneeded wells, and the financial condition of the 
operator. Multiple well bonds will be in a minimum amount of 
$50,000. 

(5) The board may accept a letter of credit in lieu of a 
surety bond or certificate of deposit. A letter of credit must 
meet the following conditions: 

(a) it must be issued by an FDIC-insured, Montana 
commercial bank; or an out-of-state FDIC-insured, commercial 
bank having assets in excess of $200,000,000; 

(b) it must be in an amount equal to the bond otherwise 
required; 

(c) it must be for a term of not less than one year, 
automatically renewable for additional one year period(s), and 
irrevocable during its term. The bank issuing the letter of 
credit must notify the board, by registered or certified mail, 
not less than 120 days prior to the expiration date of the 
letter of credit if it does not intend to renew the letter; 

(d) the letter of credit will remain in the custody of the 
board; and 



36-5056 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.1410 

(e) the letter of credit must provide that it is immedi- 
ately payable in full upon demand by the board if the person on 
whose behalf the letter is issued fails to properly plug each 
dry or abandoned well and restore the surface of the location as 
provided by board rules . 

(6) The board may reject a letter of credit and demand 
other security if it has reason to doubt the solvency of the 
bank or to believe the obligation of the letter of credit has 
become impaired. The board may require a financial statement 
from the principal and proof of solvency of the bank at any time 
before or after acceptance of the letter of credit. (History: 
82-11-111, MCA; IMP, 82-11-111, 82-11-121, 82-11-123, 82-11-124, 
82-11-127, and 82-11-137, MCA; NEW . 1992 MAR p. 2171 and 1996 
MAR p. 1308, Eff . 5/10/96; AMD, 1996 MAR p. 1308, Eff. 5/10/96; 
AMD , 1997 MAR p. 471, Eff. 3/11/97; AMD, 1998 MAR p. 482, Eff. 
2/13/98; AMD, 2000 MAR p. 3542, Eff. 12/22/00.) 

36.22.1409 HEARINGS (1) For new wells or projects a peti- 
tion for hearing of the application for underground injection 
must be filed in triplicate with the board. Upon receipt of the 
petition, the board will set a hearing date for the application, 
and cause notice of the hearing to be published as provided in 
82-11-141, MCA. Notice of hearings will be first published at 
least 3 days in advance of the hearing date. 

(2) Administrative approval may be given for an additional 
well or recompletion of an existing well within a previously 
approved area or enhanced recovery project, provided that the 
applicant demonstrates through the application that the well 
requested has substantially the same characteristics and 
operating parameters previously approved by the board for 
injection wells in the project. (History: 82-11-111, MCA; IMP , 
82-11-111, 82-11-121, 82-11-123, 82-11-124, 82-11-127, and 82- 
11-137, MCA; NEW, 1992 MAR p. 2171 and 1996 MAR p. 1308, Eff. 
5/10/96; AMD, 1996 MAR p. 1308, Eff. 5/10/96) 

3 6.22.1410 NOTICE OF APPLICATION (1) Notice of appli- 
cation for underground injection permit must be mailed to each 
current operator, lease owners, and surface owners, within the 
area of review. Such notices must be mailed on or before the 
date the application is mailed to or filed with the board. 

(2) Applicants for an additional new well or wells, or for 
recompletion of an existing well or wells to injection service, 
within an approved area or enhanced recovery project must: 

(a) mail notice to each current operator, lease owner of 
non-operated lease, mineral owner of non-operated lease within 
the area of review, and the surface owner of each new well site, 
on or before the date the application is mailed to the board; 
and 



ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-5057 



OIL & GAS CONSERVATION 36.22.1411 



(b) Advise each party to which notice is given that the 
application is eligible for administrative approval by the 
program director, unless objections are received within 20 days 
of receipt of the application by the program director. 
(History: 82-11-111, MCA; IMP, 82-11-111, 82-11-121, 82-11-123, 
82-11-124, 82-11-127, and 82-11-137, MCA; NEW, 1992 MAR p. 2171 
and 1996 MAR p. 1308, Eff. 5/10/96; AMD, 1996 MAR p. 1308, Eff. 
5/10/96; AMD, 2000 MAR p. 3542, Eff. 12/22/00.) 

36.22.1411 BOARD AUTHORIZATION (1) No injection program 
shall be instituted until the same has been authorized by the 
board. 

(2) The board will make such special orders and rules for 
the individual case as conditions may justify. 

(3) If the board determines, or is notified by EPA, that 
the approval of an application, or a portion of the application, 
is beyond the scope of delegated authority, or requires the 
concurrence of EPA, the board will refer the application to EPA, 
and final disposition of the application will be deferred until 
EPA concurrence is received. (History: 82-11-111, MCA; IMP, 82- 
11-111, 82-11-121, 82-11-123, 82-11-124, 82-11-127, and 82-11- 
137, MCA; NEW, 1992 MAR p. 2171 and 1996 MAR p. 1308, Eff. 
5/10/96; AMD . 1996 MAR p. 1308, Eff. 5/10/96.) 

Rules 36.22.1412 and 36.22.1413 reserved 



ADMINISTRATIVE RULES OF MONTANA 12/31/00 36.5057.1 



36.22.1414 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

36.22.1414 NOTICE OF COMMENCEMENT OR DISCONTINUANCE - 
PLUGGING OF ABANDONED WELLS (1) Within 30 days of the com- 
mencement of underground injection operations, the applicant 
must notify the board of the same and the date of commencement 
in conjunction with the filing of form 4 for well completions 
and recompletions . 

(2) Within 3 days after the discontinuance of an enhanced 
recovery or liquid hydrocarbon storage project, the operator of 
the project must notify the board of the date of such discon- 
tinuance and the reasons therefor. 

(3) Before any class II well shall be abandoned, written 
notice must be served on the board, and approval of the abandon- 
ment plan received from the program director or other authorized 
representative of the board. The abandonment plan must, at a 
minimum provide for isolation of the injection zone with a 
cement, or mechanical plug capped with cement, and for the 
isolation and protection of each USDW in such a manner as to 
prevent movement of fluids between USDW' s . 

(4) Injection wells which fail a mechanical integrity test 
(MIT) , or which otherwise have lost mechanical integrity, will 

be immediately removed from service and promptly repaired or 
plugged for abandonment within 180 days of the failed test or 
discovery of lost mechanical integrity unless otherwise ordered 
by the board; provided, however, that the operator of an 
injection well that has failed the MIT or has lost mechanical 
integrity may apply to the program director, or other authorized 
representative of the board, to defer repair or plugging. Any 
deferment granted will be under such conditions of physical 
isolation of the injection zone, or monitoring and reporting 
requirements deemed necessary under the circumstances to protect 
any USDW's penetrated by the wellbore. Up to a 2 year deferment 
may be granted administratively from the date of the failed 
test, but will not be extended without consent of the board. 
The board may order further deferment for up to 2 years, after 
notice and hearing, upon a showing that all USDW's are protect- 
ed. 

(5) Injection well operators will report the status of each 
unplugged injection well in its monthly injection reports on 
form 5. The operator will notify the board of any well which the 
operator expects to be shut-in or temporarily abandoned for a 
period of 6 months or more. Any injection well which has been 
shut-in or temporarily abandoned for a period in excess of 2 
years must be properly plugged and abandoned. An operator may 
apply for a plugging deferment as provided in (4) above upon a 
showing of reasonable cause and demonstration of non-endanger- 
ment to USDW's. (History: 82-11-111, MCA; IMP, 82-11-111, 
82-11-121, 82-11-123, 82-11-124, 82-11-127, and 82-11-137, MCA; 
NEW . 1992 MAR p. 2171 and 1996 MAR p. 1308, Eff. 5/10/96.) 



36-5058 6/30/96 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.1415 

36.22.1415 RECORDS REQUIRED (1) The owner or operator of 
any class II injection well or wells must keep and retain for at 
least 5 years, an accurate record of: 

(a) the cumulative amount of fluid injected into such well 
or wells; 

(b) the wellhead pressure or pressures, and the injection 
rate at the time the pressure is recorded; 

(c) the total amount of water produced, and the total 
amount of oil and gas produced from an enhanced recovery 
project ; 

(d) the pressure in the casing - tubing annulus if monitor- 
ing of such pressure is required as part of a mechanical 
integrity test; 

(e) the results of any chemical or physical analyses 
performed on injection zone fluids and injected fluids. 

(2) The information required in (1) (a) through (d) of this 
rule must be observed at least weekly and a representative 
observation recorded at least monthly and filed with the board 
on board form 5 . 

(3) The owner or operator of any class II injection well 
permitted after the effective date of this rule must conduct a 
chemical analysis of the typical injected fluids during the 12th 
month of injection. Samples of typical injected fluids must be 
taken at the injection wellhead, or, where more than one well is 
receiving fluid from a common facility, the sample may be taken 
from the discharge line of such facility. The chemical 
analysis of the typical injected fluids must include tests for 
total dissolved solids (TDS), specific conductivity, pH, and 
percent oil and grease. The results of such analysis must be 
submitted in writing to the board within 45 days after the 
sample is taken. (History: 82-11-111, MCA; IMP . 82-11-111, 82- 
11-121, 82-11-123, 82-11-124, 82-11-127, and 82-11-137, MCA; 
NEW , 1992 MAR p. 2171 and 1996 MAR p. 1308, Eff. 5/10/96 AMD . 
2 000 MAR p. 3542, Eff. 12/31/00.) 

36.22.1416 MECHANICAL INTEGRITY (1) From and after the 
effective date of these rules, all new wells drilled for, and 
all existing wells converted to, water injection or disposal 
must demonstrate mechanical integrity before being placed into 
service. A mechanical integrity test must be designed to 
determine whether there is a significant leak in the tubing, 
casing, or packer of the well, and whether there is a signifi- 
cant movement of injected fluid into any USDW or between any 
USDW s through vertical channels adjacent to the wellbore. The 
owner or operator of an injection well regulated under this 
chapter must maintain the mechanical integrity of such well 
until the well is plugged. 

(2) A mechanical integrity test that demonstrates that 
there are no significant leaks in the tubing, casing, or packer 
will include: 

ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-5059 



36.22.1416 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 



(a) a pressure test of the casing-tubing annulus using 
liquid or gas, or 

(b) monitoring of the casing-tubing annulus following a 
valid initial pressure test, or 

(c) a radioactive tracer survey, timed run method, or 

(d) any other test or combination of tests considered 
effective by the board, and approved by the director, office of 
drinking water, U.S. EPA. 

(3) A mechanical integrity test also will include a demon- 
stration that there is no significant movement of injected fluid 
in vertical channels adjacent to the wellbore. Such demonstra- 
tion must include a cement bond log (with a variable density 
curve, travel time curve, amplitude curve, and gamma ray curve) 
or equivalent and may include the following: 

(a) cementing records which demonstrate volume and type of 
cement used and which demonstrate absence of unauthorized fluid 
migrations adjacent to the wellbore; 

(b) radioactive tracer surveys; 

(c) noise logs; 

(d) temperature surveys; 

(e) oxygen activation logs; or 

(f) any other test or combination of tests considered 
effective by the board and approved by EPA. 

(4) After the effective date of these regulations, all 
existing injection wells which have not had an initial mechani- 
cal integrity test must be tested for mechanical integrity as 
directed by the board. 

(5) Injection wells must be retested for mechanical integ- 
rity no less than once each 5 years from the date last tested. 
Wells last tested under supervision of EPA will be retested 
under supervision of the board no less than 5 years from the EPA 
test date. 

(6) A pressure test of the casing- tubing annulus as pro- 
vided in (2) (a) must be performed at a minimum surface pressure 
of 3 00 pounds per square inch (psi) or 100 psi above the actual 
injection pressure at the time tested, whichever is greater; 
provided, however, that the maximum test pressure will not be 
required to exceed 800 psi surface pressure. The test will be 
considered successful if the applied pressure can be held for 15 
minutes with no more than 5 percent pressure loss. 

(7) Wells which fail the mechanical integrity test must be 
immediately shut-in until either repaired, reworked, or plugged 
for abandonment in accordance with ARM 36.22.1414. Such wells 
must be successfully retested for mechanical integrity before 
being placed in injection service. 



36-5060 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.1417 

(8) Subsequent to any mechanical integrity test, a well 
operation which causes the injection packer to be unseated or in 
which the tubing or packer was pulled, repaired or replaced or 
that has experienced a loss of mechanical integrity will require 
that the well be retested for mechanical integrity before being 
placed in service. (History: 82-11-111, MCA; IMP . 82-11-111, 82- 
11-121, 82-11-123, 82-11-124, 82-11-127, and 82-11-137, MCA; 
NEW . 1992 MAR p. 2171 and 1996 MAR p. 1308, Eff. 5/10/96; AMD . 
1996 MAR p. 1308, Eff. 5/10/96.) 

36.22.1417 NOTIFICATION OF TESTS - REPORTING RESULTS 

(1) To the extent practicable, the board's field represen- 
tative will schedule routine mechanical integrity tests required 
under ARM 36.22.1416. The owner or operator of a class II 
injection well must give the board at least 48 hours advance 
written, telephone, or facsimile notice of any mechanical integ- 
rity test not originally scheduled by a board representative. 
Notification of tests not included in the board's routine test 
schedule must specify the name and telephone number of the 
person responsible for scheduling the test, the name and address 
of the owner or operator of the injection well, the name and 
location of the well, and the time and date the mechanical 
integrity test will be performed. The board may at any time 
request a retest for wells where the mechanical integrity test 
was not performed under the oversight of a representative of the 
board. 

(2) The owner or operator must provide a subsequent report 
of any mechanical integrity test (MIT) on board form 2 regard- 
less of whether or not the MIT is witnessed by a board repre- 
sentative. Subsequent reports are due within 15 days of the 
test unless remedial repairs are required, in which case a 
subsequent report is due within 15 days of completion of the 
remedial work. If submitted reports are found to not meet board 
requirements or if approved testing procedures were not used, 
the board may require a retest. 

(3) Subsequent reports will include the date of the test 
or the date on which work began, the manner or method of test- 
ing, the results of the test, any remedial work done or required 
to be performed to demonstrate mechanical integrity, the type 
and cause of the well failure, and the pressure recording chart 
used to document the annulus pressure test. The name, address, 
and telephone number of the company representative, consultant, 
or contractor that performed the test also must be provided. 

(4) Two copies of any well logs, surveys, fluid analyses 
or any other reports of a technical nature run or made during 
the test or as part of any reworking or repair efforts must be 
submitted with the subsequent report. (History: 82-11-111, MCA; 
IMP , 82-11-111, 82-11-121, 82-11-123, 82-11-124, 82-11-127, and 
82-11-137, MCA; NEW , 1992 MAR p. 2171 and 1996 MAR p. 1308, Eff. 
5/10/96; AMD, 1996 MAR p. 1308, Eff. 5/10/96.) 

ADMINISTRATIVE RULES OF MONTANA 6/30/96 36-5061 



36.22.1418 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

36.22.1418 EXEMPT AQUIFERS (1) The board may authorize 
the exemption of an aquifer from classification as an under- 
ground source of drinking water provided the aquifer: 

(a) does not currently serve as a source of drinking 
water ; and 

(b) is not reasonably expected to serve as a source of 
drinking water because: 

(i) the aquifer produces, or is capable of producing, 
mineral, hydrocarbon, or geothermal energy in commercial quanti- 
ties, or 

(ii) the aquifer is situated at a depth or location which 
makes recovery of the water for drinking water purposes economi- 
cally or technologically impractical, or 

(iii) the aquifer is so contaminated that it would be 
economically or technologically impractical to render the water 
fit for human consumption, or 

(iv) the aquifer is located above a class III well mining 
area subject to subsidence or catastrophic collapse; and 

(c) the total dissolved solids content of the groundwater 
is more than 3,000 and less than 10,000 milligrams per liter and 
the aquifer is not reasonably expected to supply a public water 
system. 

(2) Exempt aquifers will include: 

(a) any aquifer or portion of an aquifer exempted by EPA 
prior to the effective date of these regulations; 

(b) any aquifer or portion of an aquifer exempted by the 
board after the effective date of these regulations subsequently 
proposed after notice and hearing, provided such exemption is 
approved by EPA as required in 40 Code of Federal Regulations, 
part 144.7(b) (3) ; 

(c) any aquifer or portion of an aquifer exempted by the 
board as a part of a public hearing on an application for an 
enhanced recovery or area injection permit or other class II 
well; or 

(d) any aquifer or portion of an aquifer proposed by the 
board for exemption as part of the UIC primacy delegation or 
subsequently proposed after notice and hearing, provided such 
exemption is approved by EPA. (History: 82-11-111, MCA; IMP, 
82-11-111, 82-11-121, 82-11-123, 82-11-124, 82-11-127, and 82- 
11-137, MCA; NEW, 1992 MAR p. 2171 and 1996 MAR p. 1308, Eff. 
5/10/96; AMD, 1996 MAR p. 1308, Eff. 5/10/96; AMD, 2000 MAR p. 
3542, Eff. 12/22/00.) 

36.22.1419 TUBINGLESS COMPLETIONS (1) After the effective 
date of these regulations, tubingless completions or annular 
injection wells, or wells not equipped to inject through tubing 
below a packer or other suitable sealing device in the annulus 
will not be permitted. 

36-5062 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.1423 

(2) Exceptions to this requirement will be granted for 
existing wells in a board approved enhanced recovery or pressure 
maintenance project where the applicant can demonstrate that it 
is practically or economically not feasible to equip such wells 
with tubing and packer. 

(3) Mechanical integrity testing and monitoring require- 
ments will be required more frequently and be more stringent for 
wells permitted as an exception to this rule. (History: 82-11- 
111, MCA; IMP, 82-11-111, 82-11-121, 82-11-123, 82-11-124, 82- 
11-127, and 82-11-137, MCA; NEW, 1992 MAR p. 2171 and 1996 MAR 
p. 1308, Eff. 5/10/96.) 

Rules 36.22.1420 and 36.22.1421 reserved 

3 6.22.1422 PERMIT CONDITIONS (1) Applications for injec- 
tion wells approved by the board, or administrative approvals 
issued under the board's authority, are valid for the life of 
the injection well(s) unless revoked by the board for good 
cause, after notice and hearing. 

(2) If administrative approval is requested, the board, or 
its authorized representative, may approve, modify, or reject 
any application submitted, stipulate the operating conditions, 
determine the appropriate test methods and test frequency, or 
limit the injection pressure and/or the quantity and quality of 
the fluids injected. 

(3) Any operator or owner of an injection well may request 
an administrative review by the board, at its next regularly 
scheduled business meeting, of any modifications, stipulation, 
or restriction placed on a permit by the board's staff. The 
injection well must be operated in compliance with the original 
permit conditions until the board's administrative review is 
complete. (History: 82-11-111, MCA; IMP, 82-11-111, 82-11-121, 
82-11-123, 82-11-124, 82-11-127, and 82-11-137, MCA; NEW, 1992 
MAR p. 2171 and 1996 MAR p. 1308, Eff. 5/10/96.) 

36.22.1423 INJECTION FEE - WELL CLASSIFICATION ( 1 ) The 
board will collect an annual injection fee of $200.00 for each 
injection well existing upon the effective date of these regula- 
tions, and for each injection well permitted thereafter. 

(2) Wells will be classified as injection wells, under 
these regulations, if the well: 

(a) is actively used for injection; 

(b) has been completed for injection service but is idle or 
shut-in; 

(c) has been reported to EPA as an injection well; or 

(d) has been permitted by the board as an injection well, 
whether or not actually placed into injection service. 

(3) A well will no longer be classified as an injection 
well when: 

(a) it has been permanently plugged in accordance with the 

ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-5063 



36.22.1424 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

board's rules; 

(b) it has been re-completed or converted to other approved 
uses, but not simply idled or shut-in; or 

(c) the work proposed under an approved permit was not done 
or could not be accomplished. (History: 82-11-111, MCA; IMP , 
82-11-111, 82-11-121, 82-11-123, 82-11-124, 82-11-127, and 82- 
11-137, MCA; NEW, 1992 MAR p. 2171 and 1996 MAR p. 1308, Eff. 
5/10/96; AMD, 1997 MAR p. 473, Eff. 3/11/97; AMD, 1997 MAR p. 
1589, Eff. 9/9/97; AMD, 2000 MAR p. 3542, Eff. 12/22/00.) 

36.22.1424 WAIVER OF REQUIREMENT BY PROGRAM DIRECTOR 

(1) When injection does not occur into, through, or above 
an underground source of drinking water, the program director 
may authorize a well or project with less stringent requirements 
for area of review, construction, mechanical integrity, opera- 
tion, monitoring, and reporting than required herein. 

(2) When injection occurs through or above an underground 
source of drinking water, but the radius of endangering influ- 
ence when computed under ARM 36.22.1425 is smaller or equal to 
the radius of the well, the program director may authorize a 
well or project with less stringent requirements for an area of 
review, operation, monitoring, and reporting than required 
herein to the extent that the reduction in requirements will not 
result in an increased risk of movement of fluids into an under- 
ground source of drinking water. 

(3) When reducing requirements under (1) or (2) of this 
rule, the program director shall prepare a fact sheet explaining 
the reasons for the action. (History: 82-11-111, MCA; IMP, 
82-11-111, 82-11-121, 82-11-123, 82-11-124, 82-11-127, and 82- 
11-137, MCA; NEW, 1996 MAR p. 1308, Eff. 5/10/96.) 

3 6.22.142 5 AREA OF REVIEW (1) The area of review for each 
injection well or each field, project, or area of the state 
shall be determined according to both (2) and (3), or (4) of 
this rule unless a variance from these requirements is granted 
by the board. 

(2) The zone of endangering influence shall be: 

(a) in the case of application (s) for single well class II 
permits, that area the radius of which is the lateral distance 
in which the pressures in the injection zone may cause the 
migration of the injection and/or formation fluid into an under- 
ground source of drinking water; or 

(b) in the case of an application for an area permit, the 
project area plus a circumscribing area the width of which is 
the lateral distance from the perimeter of the project area, in 
which the pressures in the injection zone may cause the migra- 
tion of the injected and/or formation fluid into an underground 
source of drinking water. 



36-5064 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 



36.22.1425 



(3) Computation of the zone of endangering influence may- 
be based upon the parameters listed below and should be calcu- 
lated for an injection time period equal to the expected life of 
the injection well or pattern. The following modified Theis 
equation illustrates one form which the mathematical model may- 
take . 



2 5 KHt: 



SIO 



ApH {h ~h ■ S G ) 



x=- 



2.30 



where : 



K 

H 
t 
S 

Q 
h 



bo 



K 



SpG, 



Radius of endangering influence from injection well 

(length) 

Hydraulic conductivity of the injection zone 

(length/ time) 

Thickness of the injection zone (length) 
Time of injection (time) 
Storage coefficient (dimensionless ) 
Injection rate (volume/time) 
Observed original hydrostatic head of injection zone 

(length) measured from the base of the lowermost 
underground source of drinking water 
Hydrostatic head of underground source of drinking 
water (length) measured from the base of the lowest 
underground source of drinking water 

Specific gravity of fluid in the injection zone (di- 
mensionless ) 
3.142 (dimensionless) 



The above equation is based on the following assumptions: 

(a) The injection zone is homogenous and isotropic; 

(b) The injection zone has infinite areal extent; 

(c) The injection well penetrates the entire thickness of 
the injection zone; 

(d) The well diameter is infinitesimal compared to "r" 
when injection time is longer than a few minutes; and 

(e) The emplacement of fluid into the injection zone 
creates instantaneous increase in pressure. 



ADMINISTRATIVE RULES OF MONTANA 



6/30/96 



36-5065 



36.22.1425 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(4) To determine the fixed radius: 

(a) In the case of application (s) for individual class II 
permit (s), a fixed radius around the well of not less than one- 
fourth mile may be used. 

(b) In the case of an application for an area permit, a 
fixed width of not less than one-fourth mile for the circum- 
scribing area may be used. 

(c) In determining the fixed radius, the following fac- 
tors shall be taken into consideration: 

(i) chemistry of injected and formation fluids; 

(ii) hydrogeology; 

(iii) population and groundwater use and dependence; and 

(iv) historical practices in the area. 

(5) If the area of review is determined by a mathematical 
model pursuant to (3) of this rule, the permissible radius is 
the result of such calculation even if it is less than one- 
fourth mile. (History: 82-11-111, MCA; IMP . 82-11-111, 82-11- 
121, 82-11-123, 82-11-124, 82-11-127, and 82-11-137, MCA; NEW . 
1996 MAR p. 1308, Eff. 5/10/96; AMD, 2000 MAR p. 3542, Eff. 
12/22/00. ) 

Sub-Chapter 15 reserved 



NEXT PAGE IS 36-5091 
36-5066 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.1609 

Sub-Chapter 16 
Regulations to Implement the Natural Gas Policy Act 

36.22.1601 WHO MAY APPLY FOR DETERMINATION (IS HEREBY 
REPEALED) (History: 82-11-115, MCA; IMP , 82-11-115, MCA; EMERG . 
NEW . 1979 MAR p. 64, Eff. 6/29/79; AMD, 1982 MAR p. 1398, Eff. 
7/16/82; REP, 1996 MAR p. 1160, Eff. 4/26/96.) 

36.22.1602 APPLICATION REOUIREMENTS AND CONTENTS (IS HERE- 
BY REPEALED) (History: 82-11-115, MCA; IMP, 82-11-115, MCA; 
EMERG ■ NEW . 1979 MAR p. 648, Eff. 6/29/79; AMD, 1982 MAR p. 
1398, Eff. 7/16/82; REP, 1996 MAR p. 1160, Eff. 4/26/96.) 

36.22.1603 DOCUMENTS AND TECHNICAL DATA SUPPORTING 
APPLICATION (IS HEREBY REPEALED) (History: 82-11-115, MCA; IMP . 
82-11-115, MCA; EMERG , NEW . 1979 MAR p. 648, Eff. 6/29/79; REP . 
1996 MAR p. 1160, Eff. 4/26/96.) 

36.22.1604 DOCKET NUMBER (IS HEREBY REPEALED) (History: 
82-11-115, MCA; IMP, 82-11-115, MCA; EMERG . NEW . 1979 MAR p. 
648, Eff. 6/29/79; REP, 1996 MAR p. 1160, Eff. 4/26/96.) 

36.22.1605 LIST OF APPLICATIONS - PUBLIC ACCESS (IS HEREBY 
REPEALED) (History: 82-11-115, MCA; IMP, 82-11-115 and 82-11- 
116, MCA; EMERG . NEW . 1979 MAR p. 648, Eff. 6/29/79; REP, 1996 
MAR p. 1160, Eff. 4/26/96.) 

36.22.1606 OBJECTIONS TO APPLICATIONS (IS HEREBY REPEALED) 
(History: 82-11-115, MCA; IMP, 82-11-115, MCA; EMERG , NEW . 1979 

MAR p. 648, Eff. 6/29/79; REP, 1996 MAR p. 1160, Eff. 4/26/96.) 

36.22.1607 DEADLINES FOR ACTION ON DETERMINATIONS (IS 
HEREBY REPEALED) (History: 82-11-115, MCA; IMP, 82-11-115, MCA; 
EMERG, NEW . 1979 MAR p. 648, Eff. 6/29/79; REP . 1996 MAR p. 
1160, Eff. 4/26/96.) 

36.22.1608 DEFICIENT APPLICATIONS (IS HEREBY REPEALED) 
(History: 82-11-115, MCA; IMP, 82-11-115, MCA; EMERG . NEW . 1979 

MAR p. 648, Eff. 6/29/79; REP, 1996 MAR p. 1160, Eff. 4/26/96.) 

36.22.1609 BOARD ACTION ON APPLICATIONS (IS HEREBY RE- 
PEALED) (History: 82-15-111, MCA; IMP, 82-15-111, MCA; EMERG . 
NEW . 1979 MAR p. 648, Eff. 6/29/79; REP, 1996 MAR p. 1160, Eff. 
4/26/96. ) 



ADMINISTRATIVE RULES OF MONTANA 6/30/96 36-5091 



m 



m 



36.22.1610 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

36.22.1610 SPECIAL FINDINGS AND DETERMINATIONS - NEW 
ONSHORE PRODUCTION WELLS UNDER SECTION 103 (REPEALED) (Histo- 
ry: 82-11-115, MCA; IMP . 82-11-115, MCA; EMERG, NEW . 1979 MAR p. 
648, Eff. 6/29/79; REP, 1996 MAR p . 1160, Eff. 4/26/96.) 

36.22.1611 SPECIAL FINDINGS AND DETERMINATIONS - STRIPPER 
WELL PRODUCTION (REPEALED) (History: 82-11-115, MCA; IMP . 82- 
11-115, MCA; EMERG . NEW . 1979 MAR p. 648, Eff. 6/29/79; REP . 
1996 MAR p. 1160, Eff. 4/26/96.) 



NEXT PAGE IS 36-5121 
36-5092 6/30/96 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 3 6.22.1703 

Sub-Chapter 17 
Horizontal Wells and Enhanced Tax Recovery Incentives 

36.22.1701 CERTIFICATION OF HORIZONTAL WELLS ( 1 ) Upon 
request by the operator, the board's staff will certify to the 
department of revenue the completion of a horizontal well. Such 
well must be drilled and completed in conformance with the 
board's rules and any required reports, including the direction- 
al survey required under ARM 36.22.703(5), must be on file with 
the board before the certification is made. A well that has not 
produced for five (5) or more years prior to its completion as 
a horizontal well, or a well which was permanently plugged for 
abandonment prior to its re-entry and completion as a horizontal 
well, will be considered a new horizontal well for the purpose 
of certification. (History: 7-7-2101 and 82-11-111 MCA; IMP, 
15-23-601 and 15-36-101 MCA; NEW, 1994 MAR p. 1875, Eff. 
7/8/94. ) 

36.22.1702 CERTIFICATION OF ENHANCED RECOVERY PROJECTS 
(1) The board, upon application of an interested party and 

notice and hearing, will certify to the department of revenue 
its approval of a new or expanded enhanced recovery project. 
Projects requiring compulsory unitization under 82-11-204, MCA, 
et seq. and wholly voluntary projects requested under ARM 
36.22.1229 through 36.22.1232 must comply with the application, 
notice, and hearing requirements under the applicable rule or 
statute. (History: 7-7-2101 and 82-11-111 MCA; IMjP, 15-23-601 
and 15-36-101 MCA; NEW, 1994 MAR p. 1875, Eff. 7/8/94; AMD, 
2000 MAR p. 3542, Eff. 12/22/00.) 

36.22.1703 APPLICATION - CONTENTS AND REOUIREMENTS 

(1) Applications for certification and approval of 
secondary recovery projects and new tertiary recovery projects 
that comply with the requirements of 82-11-204, MCA, et seq. 
need not file an additional application for certification; the 
project will be certified upon approval by the board. Applica- 
tions for secondary recovery projects and new tertiary recovery 
projects following the procedure in ARM 36.22.1229 through 
36.22.1232 must additionally include a map or plat showing the 
project boundaries and a legal description of all of the tracts 
to be included in the project area. Applicants for certifica- 
tion of tertiary projects must also describe the tertiary 
method (s) to be used. Applicants will be required to supply 
technical and economic evidence that the project can reasonably 
be expected to result in a significant increase in the ultimate 
recovery of oil. 

(2) Applications for approval and certification of 
expansion of an existing enhanced recovery project must include: 

ADMINISTRATIVE RULES OF MONTANA 12/31/00 36-5121 



36.22.1704 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 

(a) a map or plat of the previously approved project and 
the area to be affected by the proposed expansion; 

(b) a description of the method or methods to be used to 
enhance recovery in the project area; 

(c) the name(s), depths, and description of the unitized 
or target formation (s) and the formation (s) which are producing 
or have produced within the project area; 

(d) the location of all oil and gas wells, input wells, 
dry holes, and drilling wells; 

(e) the location of proposed new injection or production 
wells or horizontally re-completed injection or production wells 
and the anticipated timetable for drilling or re-completion of 
such wells; 

(f) the proposed effective date of the project. If the 
project expansion involves a change in operating conditions the 
application must include a description of both the current 
operating practices and the proposed changes to be made. The 
applicant must demonstrate that the proposed expansion is 
reasonably expected to result in the recovery of oil that would 
not otherwise be recovered if the expansion were not performed. 

(History: 7-7-2101 and 82-11-111 MCA; IMP, 15-23-601 and 15-36- 
101 MCA; NEW . 1994 MAR p. 1875, Eff. 7/8/94; AMD , 2000 MAR p. 
3542, Eff. 12/22/00.) 

3 6.2 2.17 04 DETERMINATION OF PRODUCTION DECLINE RATE 

(1) Production decline rates used for calculation of 
incremental production from secondary and tertiary recovery 
projects and expanded enhanced recovery projects will be 
determined by the board upon application of the operator and 
after notice and hearing. This determination may be made con- 
currently with the approval and certification of the enhanced 
recovery project, or at a subsequent hearing. 

(2) The production decline rate for a project will be 
based on the primary producing mechanism (s) of the reservoir 
and, where applicable, the secondary recovery mechanism(s) of 
the project and the production history of the project. Where 
the production history of the project area is sufficient a 
decline rate will be determined by applying an exponential or 
hyperbolic method of analysis. If production history is not 
sufficient or appropriate an exponential or hyperbolic method 
may be applied to an analogous project, field, or well. 
Conventional or numeric reservoir performance analysis methods 
may also be used. 

(3) The applicant for a hearing will file with the board's 
staff the production history data, the proposed analysis 
method (s), and any supporting information which the applicant 
intends to present at the hearing. This filing will be 



36-5122 12/31/00 ADMINISTRATIVE RULES OF MONTANA 



OIL AND GAS CONSERVATION 36.22.1705 

sufficiently in advance of the hearing to allow the staff an 
opportunity to review the data and methods selected in order to 
provide a recommendation for approval, modification, or rejec- 
tion of the application to the board. 

(4) The determination of the decline rate for individual 
wells in primary production which have been horizontally re- 
completed will be done by filing a request for determination 
with the board's staff. The operator may propose the method of 
analysis and provide data which it wishes the board's staff to 
use in the determination. The staff's determination will be 
presented to the board at the next available regular meeting. 
In the absence of a protest of the determination further 
evidence or testimony will not be required. (History: 7-7-2101 
and 82-11-111 MCA; IMP, 15-23-601 and 15-36-101 MCA; NEW, 1994 
MAR p. 1875, Eff . 7/8/94. ) 

36.22.1705 FILING FEES (1) An application for determina- 
tion of the production decline rate from a new or expanded 
enhanced recovery project will pay a fee based upon: 

(a) the number of wells which produce or have produced in 
the project area; 

(b) the method used to analyze these data. Fees will be 
established at the time the request for determination is made to 
the board's staff and must be paid before the rate of decline is 
certified to the department of revenue. The fee schedule will 
be as follows: 

Projects which require review/analysis of production from: 
10 or fewer producing wells 
10 to 100 wells $100.00 plus $5.00 per well 



$100, 


.00 


$100. 


.00 


over 


10 


$550. 


.00 


over 


100 



over 100 wells $550.00 plus $2.50 per well 



Methods of analysis multiplier: 

To the fee determined above multiply by: 

1 (no multiplier) exponential or hyperbolic analysis of 

project data 

1.5 exponential or hyperbolic analysis of 

analog project 

2.0 numeric simulation or material bal- 

ance/volumetric methods 

For unusually complex or atypical methods or projects, the 
staff may request that the board establish a processing fee as 
part of the approval/certification hearing for a particular 
project. (History: 7-7-2101 and 82-11-111 MCA; IMP, 15-23-601 
and 15-36-101 MCA; NEW, 1994 MAR p. 1875, Eff. 7/8/94.) 



ADMINISTRATIVE RULES OF MONTANA 9/30/95 36-5123 



35.22.1706 DEPARTMENT OF NATURAL RESOURCES 

AND CONSERVATION 



36.22.1706 DEFINITIONS (1) For the purposes of this 
subchapter the definitions at 15-23-601, MCA, apply. (History: 
7-7-2101 and 82-11-111, MCA; IMP, 15-23-601 and 15-36-101, MCA; 
NEW . 1994 MAR p. 1875, Eff. 7/8/94 REP, 2000 MAR p. 3542, Eff. 
12/22/00. ) 



• 



NEXT PAGE IS 3 6-522 5 
36-5124 6/30/98 ADMINISTRATIVE RULES OF MONTANA 



MEMORANDUM OF 
UNDERSTANDING 

Between 

United States Department of tfie Interior 
Bureau of Land Management, Montana State Office 

And 

Ttie State of Montana, Board of Oil and Gas Conservation 

Concerning 

Oil and Gas Well Spacing/Well Location Jurisdiction 



Memorandum of Understanding 

between 

U.S. Department of the Interior 

Bureau of Land Management, Montana State Office 

and 
The State of Montana, Board of Oil and Gas Conservation 

concerning 
Oil and Gas Well Spacing/Well Location Jurisdiction 

I . Purpose 

The State of Montana, Board of Oil and Gas Conservation (Board) has 
jurisdiction for well spacing/well location on State and fee lands. The 
Bureau of Land Management (BLM) has jurisdiction over federal and Indian 
lands. This agreement between the BLM and the Board is intended to (1) 
promote cooperation between BLM and the State of Montana; (2) provide 
consistency in establishing spacing units and well location requirements in 
areas involving diverse mineral ownerships; (3) protect correlative rights; 
(4) eliminate unnecessary duplication of effort; and (5) define duties and 
responsibilities . 

This agreement shall not supersede existing laws, rules, or regulations of 
either party, nor require commitment of manpower or funds beyond legal 
authorities or appropriations. 

II . Authority 

Montana Code Annotated 82-11-112; the Mineral Leasing Act of 1920; the 
Acquired Land Leasing Act of 1947; the Indian Minerals Development Act of 
1982; the Allotted Indian Land Leasing Act of 1909; the Unallotted Indian 
Leasing Act of 1938; and Interior Department Secretarial Order No. 3087. 
Regulations pertaining to well spacing programs exists at 43 Code of Federal 
Regulations 3162.3-1. 



III. Procedures 

THE BLM AND THE BOARD AGREE AS FOLLOWS : 

A. Point of Contact 

Each party shall appoint a specific person or persons who shall be the 
point of contact to facilitate communication and coordination in implementing 
this agreement. 

B. Procedures and Jurisdictions 

(1) Federal Land 

Subject to BLM approval, the Board shall issue well spacing/well 
location orders affecting federal lands. Upon receipt of a well spacing/well 
location docket request involving federal lands, the Board shall notify BLM of 
the hearing and hold the hearing. The BLM shall be entitled to present expert: 
testimony with respect to such spacing determinations, and shall be informed 
in writing of any disposition. If the BLM should desire to protest any 
requested determination, it shall do so by written protest delivered to the 
Board prior to the hearing or by appearance at the hearing Any such protest 
shall specify the BLM objections and the conditions, if any, under which the 
BLM will approve the relief requested. The Board's determination/order is 
approved if the BLM does not object. If the BLM objects, the final decision 
as relating to federal lands shall be made by BLM. 

Orders issued by the Board which affect spacing units containing 
both federal and non- federal lands shall contain the following statement: 
"A federal communitization agreement for spacing units which 
contain both federal and nonfederal lands shall be submitted to the Authorized 
Officer of the Bureau of Land Management prior to or upon completion of n 
producible well." 



r« 



^ 



(2) Indian Land 

The BLM will adopt, as standard practice for trust lands, the 
state-wide spacing rules and set-back requirements as defined in the Board's 
General Rules and Regulations, Section 36.22.702. Applications for field 
spacing or exception location requests on trust lands will be submitted to the 
BLM. The BLM shall forward copies of said applications to the Board for 
inclusion into the Board's notice of hearing. The Board's notice of hearing 
shall serve to notify the general public of applications concerning trust 
lands. The BLM shall ensure that any affected tribes and the Bureau of Indian 
Affairs (BIA) Area Office receive timely notice and copies of applications for 
field spacing or exception location requests on trust lands. 

The Board shall conduct hearings involving trust lands, and will receive 
evidence and hear testimony relating to trust land applications. The Board 
will not issue orders granting exception locations or establishing spacing on 
trust lands. Pleadings, papers, documents, or testimony from any hearing 
before the Board shall be made a part of the administrative record upon which 
trust land decisions will be made by BLM. 

After completion of the administrative record, which will be the basis for 
approval or disapproval of a field spacing or exception location application 
involving trust lands, the BLM will issue a decision. The BLM will notify the 
BIA and affected tribes of any applications involving trust lands. Upon 
request, an affected tribe or individual Indian will be granted an opportunity 
for a pre-decision meeting to review the administrative record, submit 
additional information, and express their views. An applicant may also 
request such a meeting. If requested, the BLM shall notify the affected 
tribe, if any, and the BIA Area Office of the time and place of the meeting. 

The BLM shall notify the applicant, the Board, the BIA, and the affected tribe 
of the Bureau's decision. 



(3) Confidentiality 

Each agency will abide by the confidentiality requirements of its ovm laws and 
regulations. 

(4) Access to Records 

Each agency will provide for public access to records in accordance with its 
own laws and regulations. 

IV. Expiration 

This Memorandum of Understanding will continue in effect indefinitely unless 
formally canceled by either party. 

V. Review 

Each of the parties to this Memorandum of Understanding will review it 
annually to determine its currency, adequacy, and continuing need. 

VI . Amendment 

Each of the parties to this Memorandum of Understanding may propose changes to 
it at any time. Any such change shall be proposed in writing in the form of 
an amendment, and shall not become effective until agreed to and signed by 
both of the parties. 

VII . Cancellation 

Either of the parties to this Memorandum of Understanding may unilaterally 
terminate it by providing 60 days written notice to the other party. 



c# 



VIII. Affect on Existing Agreements 

This Memorandum of Understanding specifically supersedes the Cooperative 
Agreement between the parties hereto, signed by the BLM State Director on 
November 3, 1987, and the Board Chairman on November 19, 1987. 



APPROVED: 




)tate Director, Montana Stc 
Bureau of Land Management' 
U.S. Department of the Interior 




ice 



/ ■' 'i^\y^^..\ 




Chairman 

Montana Board of Oil and Gas 

Conservation 



Da 



te signed: /^///f^ 



Da 



te signed: / ^' / ,0 / ^/ .^ 



c# 



m 



FORM NO-1 R7/99 {SUBMIT IN DUPLICATE) ARM 36 22 306 

ARM 36.22 307 
TO 

BOARD OF OIL AND GAS CONSERVATION 
B OF THE STATE OF MONTANA 

^ 2535 ST. JOHNS AVENUE BILLINGS, MONTANA 59102 

ORGANIZATION REPORT 



1 . Full name of the Company, Organization, or Individual 



2. Post Office Address 



(Street or Box) (City) (Slate) 

3. Form and Purpose of the Organization 



(State whether corporation, a joint stock association, firm or partnership) 



(Slate the purpose of the organization, whether producer, pipe line, refiner, etc.) 



It Foreign Corporation, give ( 1 ) state where incorporated; (2) name and post office address of Montana agent: date of qualification to do business In Montana 



Post Office Address (always give street address too) 



4. Officers: 



Trustee . 
Trustee _ 



TITLE NAME POST OFFICE ADDRESS 



President 



Vice President 



Secretary 



I reasurer 



(OVER) 



FORM NO I 



5. Directors: 



NAME 



POST OFFICE ADDRESS 



6. Is this a re-organization? . 



Dated this 



day of- 



By 



State of- 



Office 



County of 



being first duly sworn deposes and says that (s)he is the 



of 



: that (s)he has personal knowledge of the owner- 



ship, management and officers of said 

above made concerning said organization are true and correct. 

Subscribed and sworn to before me this day of. 



; that the statements 



Notary Public, State of . 
Residing at 



My Commission Expires 



MONTANA BOARD OF OIL AND GAS CONSERVATION 



Date Registered 



ONE COPY WILL BE RETURNED 



Name 



Title 



FORM NO 2 R7/99 



Submit In Quadruplicate To; 

MONTANA BOARD OF OIL AND GAS CONSERVATION 

2535ST. JOHNS AVENUE 

BILLINGS, MONTANA 59102 



ARM 36 22 307. 601,605 
1003. 1004. 1011. 
1013.1103.1222.1240 
1301, 1306, 1309. and 

1417 



SUNDRY NOTICES AND REPORT OF WELLS 



Operator 

Address 

City 

Telephone Number 



State 



{ ) 



Zip Code 
Fax Number ( 



Location of well (1/4-1/4 section and footage measurements): 



If directionally or horizontally drilled, show both surface and bottom hole locations) 



API Number: 

stale County 



Well Type (oil, gas, injection, other): 



Lease Name: 



Lease Type (Private/State/Federal): 



Well Number: 



Unit Agreement Name: 



Field Name or Wildcat: 



Section, Township, and Range: 



County: 



Indicate below with an X the nature of this notice, report, or other data: 



Notice of Intention to Change plans 
lotice of Intention to Run Mechanical Integrity Test 
Notice of Intention to Stimulate or to Chemically Treat 
Notice of Intention to Perforate or to Cement 
Notice of Intention to Abandon Well 
Notice of Intention to Pull or Alter Casing 
Notice of Intention to Change Well Status 
Supplemental Well History 
Other (specify) 



D 
D 
D 
D 
D 
D 
D 
D 

a 
a 



Subsequent Report 
Subsequent Report 
Subsequent Report 
Subsequent Report 
Subsequent Report 
Subsequent Report 
Subsequent Report 
Subsequent Report 
Subsequent Report 



of Mechanical Integrity Test 

of Stimulation or Chemical Treatment 

of Perforation or Cementing 

of Well Abandonment 

of Pulled or Altered Casing 

of Drilling Waste Disposal 

of Production Waste Disposal 

of Change in Well Status 

of Gas Analysis (ARM 36.22.1222) 



n 

D 

n 

D 
D 
D 

n 
n 

D 



Describe Proposed or Completed Operations; 

Describe planned or completed work in detail. Attach maps, well-bore configuration diagrams, analyses, or other information as 
necessary. Indicate the intended starting date for proposed operations or the completion date for completed operations. 



BOARD USE ONLY 


Approved 


Dale 






Name 


Title 



The undersigned hereby certifies that the information contained 
on this application is true and correct: 



Dale 



Signed (Agent) 



Print Name &Title 



SUPPLEMENTAL INFORMATION 

NOTE: Additional information or attachments may be required by Rule or by special request. 
Plot the location of the well or site that is the subject of this notice or report. 

Range 



Township . 



r- 



I 
I 



L. 



I 
I 

,1. 



Scale: I inch = 2,000 feet 



BOARD USE ONLY 



CONDITIONS OF APPROVAL 



The operator must comply with the following condition(s) of approval: 



Failure to comply with the conditions of approval may void this permit. 



FORM NO 3 R3rt)1 



9 



SUBMIT TO 

BOARD OF OIL AND GAS CONSERVATION 
OF THE STATE OF MONTANA 

2535 ST. JOHNS AVENUE 
BILLINGS, MONTANA 59102 



ARM 36.22 307 
36.22 1308 
3622.1408 



BOND 



Surety Company 
Bond Number 



KNOW ALL PEOPLE BY THESE PRESENTS. That we. 



Name and Mailing Address 



as Principal, and 



Name and mailing address 

authorized to do business in the State of Montana, are held and firmly bound unto the State of Montana, in the sum of 



as Surety, 



($. 



). 



The condition of this obligation is that the above principal(s) propose{s) to drill or acquire a well or wells for oil, gas, underground injection, or stratigraphic 
purposes in and upon land situated within the State of Montana. 





Blanket Bond 


To cover all wells drilled or acquired in the State of Montana 




Limited Bond 


To cover all wells drilled or acquired subject to the following limitations 




Individual Well Bond 


To cover one well as described below 




UIC Bond 


To cover salt water disposal wells or underground injection wells 




Replacement Bond 


To supercede and assume all wells covered by the following described bond 



NOW THEREFORE, the pnncipal shall comply with all of the provisions of the laws of the State of Montana and the rules regulations and orders of the Board 
of Oil and Gas Conservation of the State of Montana especially with reference to the proper plugging of said well or wells, and restoration of the surface of 
the location of said well or wells, and filing with the Board of Oil and Gas Conservation of the State of Montana all notices and records required by the Board. 
This bond will be released, upon request, after all liabilities are property removed from the bond. 



Date - 
Surety 



Date 



Signed 



Principal 



Signed 



Pnnt name and tjQe 



Print name and litle 



ir the pnncipal is a corporation, the bond should be executed by its duly authorized officers, with the seal of the corrxxation affixed When pnncipal or surety executes tMs bond by agent, power of attorney 
or other evidence of authority must accompany the bond 



Countersigned: Date 



Approved Date 



By 



By 



Board of Oil A Gas 



Mailing Address: 



License No. 



Montana Residont Agent or Licensed Non Resident Agent 



Slate Code 



FORM NO 4 RaiOO 
LOCATE WELL CORRECTLY 



» 



Company 
Address _ 



(SUBMIT IN TRIPLICATE) 

TO 

BOARD OF OIL AND GAS CONSERVATION 

OF THE STATE OF MONTANA 

2535 ST. JOHNS AVENUE BILLINGS, MONTANA 59102 

COMPLETION REPORT 



Lease 



ARM 36 22 307 
ARM 36 22 1011 
ARM 36 22 1013 
ARM 3622 1414 



. Well No. 



The well is located - 
Sec ;T 



(N) 
. ff. from (S) line and . 



. Field (or Area) 

(E) 
. ft. from (W) line of Sec. 



County, 



;Elevation . 



(D.F . R.B. Of G.L.) 



Commenced drilling - 



.Completed . 



Write the API# or the well name of another well on this lease if one exists _ 



The information given herewith is a complete and correct record of the well. The summary on this page is for the condition of the well at the above date. 
Completed as . Signed 

(oil well, gas well, dry hole) 
API# 25 - Title 

Date 



(Bottom Hole Coordinates from Section Line) 



From 
From . 
From 



to 
to 
to 



IMPORTANT ZONES OF POROSITY 
(denote oil by 0, gas by G. water by W; state formation if known) 

From to 

From to 

From to 









CASING RECORD 










Size 
Casing 


Weight 
Per Ft. 


Grade 


Thread 


Casing Set 


From 


To 


Sackol 
cement 


Cut And 

Pulled from 











































































TUBING RECORD 



size 
Tubing 


Weight 
Per Ft. 


Grade 


Thread 


Amount 


Perforations 















COMPLETION RECORD 



Rotary tools were used from 

Cable tools were used from 

Total depth — . ft.; Plugged back to. 



to. 
to 



.T.D.; Open hole from 



INITIAL PRODUCTION 



Well IS producing from • 
I.P. 



(if P&A show plugs above) 



■ (pool) formation. 



- barrels of oil per- 



hours - 



(Pumptng or flowir*g) " 



_MCF of -jas pet . 



to. 



PERFORATIONS 


ACIDIZED. SHOT. SAND FRACED. CEMENTED 


Inl 


sn/al 


Number and 
Size and Type 


Interval 


Amount of 
Material Used 




From 


To 


From 


To 


Pressure 



























































_ barrels of water per . 



Initial 10-day average production 

Pressures (if measured); Tubing 

Casing 

Gravity API (corrected to 60° F.) 



psi flowing; 
psi flowing; 



(bbl./day) (if taken) 



. psi shut-in 

psi shut-in 



Formation Volume Factor . 
Type of trap 



Porosity . 



% Average Connate water . 



Producing mechanism . 











DRILL STEM TESTS 




DS.T. 
No 


From 


To 


Too) Open 
(Mini 


Shul-ln 


P.P. 


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Montana Board of 
1625 11th Avenue 
P.O. Box 201601 
Helena. MT 59620 


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HsIena. MT 596: 
Ooerator: 


Montana Board of 
1625 11th Avenu 
P.O. Box 201601 


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FORM NO 6 R3/01 




















BOARD USE ONLY 




ARM 36.22 307 ci irmit rn 
ARM 36.22.1217 SUBMIT TO. 

ARM 36.22.1242 BOARD OF OIL AND GAS CONSERVATION 
f 1625 ELEVENTH AVENUE 

P.O. BOX 201601 
HELENA, MONTANA 59620-1601 

REPORT OF PRODUCTION 

(TO BE MADE BY PRODUCER) 
Oil or Gas Wells 




Field 


m 




Lease/Unit 


^ 




Operator 




12. CHECK IF AMENDED 
REPORT 




1. PRODUCER 




13. WELL CLASSIFICATION 

Check One 






OIL WELLS 










NATURAL GAS WELLS 






7. FIELDNAME 




2. ADDRES6 


14. LEASE STATUS 




8. LEASE/UNIT NAME 




3. CITY 


9. COUNTY 




4 STATE 5. ZIP 


10. CHECK IF ADDRESS CHANGE f 1 




NO. WELLS PRODUCED 




6. AGENT 
SIGNATURE 


11 MONTH OF 




NO. WELLS SHUT IN 




.■*■■■•■ • 




WELL DESCRIPTION 




PRODUCTION INFORMATION | 




15 WELL 
NUMBER 


16. API NO 
(LAST 8 DIGITS) 


17 DAYS 
PRODUCED 


18. SEC 


19 TWP 


20 RGE 


DO NOT 
USE 


21. PRODUCING 
FORMATION 


22. BBLS OF 
OIUCOND 


23 MCFGAS 24 BBLS OF 
@14 73PSIA WATER 


i 


) 
























25. INVENTORY SUMMARY 


BBLSOIL 

AND COND. 


MCFOF 
GAS 


BBLS OF 
WATER 






On Hand Start of Month 




■■ ^, :'.-■■■■■'.' 


■■" .\-;^ . ■ 


26. DISPOSITION INFORMATION 


Bbis or MCF 




Produced This Month 








BUYER 






Sold This Month 








TRANSPORTER 




Spilled This Month 








BUYER 




1 


^Flared or Vented 








TRANSPORTER 


^sed on Lease 








BUYER 






Injectec' 
Surface Pits 










TRANSPORTER 












BUYER 






N(5TE Separate 
month covered b 










TRANSPORTER 




production repor'.s covering operations m each lease must be Tiled with the Helena office of the Board ol Oil and Gas Conservation by the last day of each calendar month following the 
f the report 



INSTRUCTIONS FOR COMPLETING FORM 6 

General 

All production must be reported by the producer-if some other company owns a share of your lease, you, as the producer, are required to report 
all of the production irrespective of what your share is. Production is to be reported as follows: 

(1) Each unit or lease is to be reported on a separate form. 

(2) Producing and Shut-in wells are to be listed individually on the form. 

(3) The total production for the unit or lease must be divided among the producing wells according to one of the following rules: 

(i) Wnte the actual production from each well. 

(ii) Estimate the production from each well. 

(ill) Average the production over the several wells. 

(iv) Use the allocation factor in the unitization agreement. 

(4) Shut-in wells are listed with zero production. 

(5) Water injection wells and water disposal wells are not reported on the Form 6. 

This report of production must be postmarked no later than the last day of the month following the month of production. 

Amended Report: If a report is incon-ect because of omissions or inclusion of incorrect information , a copy will be mailed back to the agent who signed 
it, with an explanation of the problem. An amended report will be due within 40 days of the date shown on the explanation letter enclosed with 
the return form. 

Gas Pressure: All gas reported must use 14.73 PSIA as the pressure base, and 60° F as the temperature base. 

Top Portion of Form 

1, Type or write the producer company name. 
2-5. Type or write the address of the agent who completes the form. 

6. The agent completing the form is required to sign. 

7. Type or write the correct field name. 

8. Type or write the correct lease (or unit) name, only one lease per form. 

9. Type or write county in which the lease is located. 

10. Check (/ ) if there is a change of agent name, address, or phone number. If phone changes, please write new phone number after 
signature in box 6. 

1 1 . Type or write the month and year of the report. 

12. Check ('') If you are filing an amended report; when filling out an amended form, type or write all information, not just that which is 

being amended. 

13. Check (^ ) oil wells if you are reporting oil production or oil with associated gas production. Check (•/ ) natural gas wells if you are 

reporting only natural gas production. 

14. Type or write the number of wells which produced during the month, and the number of wells which were shut-in all month. 

Middle Portion of Form 

15. Type or write your well number. 

16. Type or write the 8 digits (county and sequence numbers) of the API well number. 

The complete API number can be found on the Montana Board of Oil and Gas Conservation Form 22, lower left corner. An original copy 
of this form was returned to your company as a permit to drill. 

17. Type or write the number of days operated. 

18,19.20. Type or write the Section, Township, and Range in which your well is located, 

21 Type or write the formation from which your well is producing-if a well is producing (oil, gas, or water) from more than one formation 
(unless commingling has been approved), supply a line entry for each formation and its production. 
If It is unclear how much was produced from a given formation, you may use estimates. 

22. Type or write the number of barrels of oil and condensate produced, 

23. Type or write the number of barrels of water produced. 

24. Type or write the MCF (thousands of cubic feet) of gas produced at 14.73 PSIA. 

Bottom Portion of Form 

25. Inventory Summary 
Oil and Condensate 

Type or write total BBLs for the lease of oil on hand on the first day of the month, produced, sold, spilled or lost, used on the lease, 

injected, and other. 

Gas 

Type or write the total MCFs for the lease of gas (@14.73 PSIA) produced, sold, flared or vented, used on lease, injected, and other. 

Water 

Type or write the total BBLs for the lease of water produced, injected, stored In surface pits (tanks, etc.) and other. 

26. Disposition Information 
Oil and Condensate 

Type or wnte the number of BBLs sold, the name of the company to whom the oil was sold (buyer), and the name of the company who 

transported (transporter) the oil from the lease. 

Gas 

Type or write the MCF (@14.73 PSIA) sold, and the name of the company to whom the gas was sold (buyer), and the name of the 

company who transported (pipeline or other transporter) the gas from the lease. 

NOTE: Each line of sales and/or transportation information must represent only one purchaser and one transporter Do not lump your 

sales to multiple purchasers together. In the case of multiple transporters for the same sale, type or write the sale on multiple lines so 

that the volume transported by each transporter Is separately and correctly identified. 

If additional space is needed, use a separate sheet. 



For help, contact: (406) 444-6731 



FORM NO 7 R7/99 ARM 36 22 307 

ARM 36 22 1243 
SUBMIT ONE COPY TO: 

BOARD OF OIL AND GAS CONSERVATION 
^ OF THE STATE OF MONTANA 

1625 ELEVENTH AVENUE P.O. BOX 201601 HELENA, MONTANA 59620-1601 

TRANSPORTATION AGENCY'S MONTHLY REPORT OF 
RECEIPTS AND DISPOSITION OF CRUDE OIL 

From: 

FIELD . 



(Pool) 
COUNTY I certify the following to be a correct statement. 

MONTH OF 



(Name of Transportation Agency) 
METHOD OF TRANSPORTATION: By — 



("Pipeline," "Truck," "Rail") 



P.O. Address 



Bbis In transit or storage on first day of said month received from PRODUCERS in said field. 

Bbls. received from PRODUCERS in said field during said month. 

Bbls. received from other TRANSPORTERS; i.e., 



during said month. (Name) 

TOTAL 

Bbls. deducted for 



(State Cause) 
Bbls. delivered to. or shipped by rail to consignees In Montana 
, Bbls. delivered to. or shipped by rail to consignees elsewhere. 
Bbls. delivered to other TRANSPORTERS, i.e. 



during said month. (Name) 

. Bbls. remaining in transit or storage on last day of said month. 
. Bbls. lost by accident, fire. etc. 

TOTAL 

REMARKS 



NOTE; Malt one copy to the office of the Board of Oil and Gas Conservation of the State of Montana, Helena. Montana, on or before the last day of each calendar month following the 
month covered by the report. Separate report must be filed covering production from each field 



FORM NO 8 R7«9 



SUBMIT ONE COPY TO 



» 



BOARD OF OIL AND GAS CONSERVATION 

OF THE STATE OF MONTANA 

1625 ELEVENTH AVE. P.O. BOX 201601 HELENA, MONTANA 59620-1601 



ARM 36 22 307 
36 22 1243 



REFINER'S MONTHLY REPORT OF RECEIPTS 
AND DISPOSITION OF CRUDE OIL 



MONTH OF. 



REFINER'S POST OFFICE ADDRESS: 



I CERTIFY the following to be a correct statement. 



PLANT CAPACITY (in bbls. of oil refinable per day): 



Name of Refinery 



By- 



(Agent) 



(Insert name of fieldl 










REFINER'S STOCKS on first day of said month: 

In Refiner's storage tanks, from 


FIELD 
(Bbls.) 


FIELD 
(Bbls.) 


FIELD 
(Bbls.) 


FIELD 
(Bbls.) 


In transit by railroad, from 










TOTAL 










RECEIVED DURING SAID f*/10NTH: 

Pipeline, from 

Truck from 


















Railroad, from 










TOTAL 










DEDUCTIONS for 










REFINED during said month 

LOST by fire accident, etc. from 


















TOTAL 










IN STORAGE AND/OR TRANSIT last dav of month' 




















Railroad 










TOTAL 











Q. If plant was not operated to capacity throughout said month, state why not. (i.e., "insufficient crude supply," "lack of market demand for product," etc.). 



Q Do you need more crude oil? If so, state from what fields preferred, number of barrels per day, and for how long a period of time. 



NOTE If ar/ reccipis By tnx*. attac^ delated slalemenl shcpwing dale o( rete()ts. number of barrels In eadi delivery, name o( shipper or seller and post office address o( uucker ot Bucking agency Ma* one (1 ) copy 10 
»ie office o( ttie Board o( Oil and Gas Conscrvatkxi ot ttie Slale o( Monlana. Helena. Montana on or bcloro the lasl day of each calendar monlh blowing Ihe rtxxilh covered by report 



FORM NO 9 R7/99 

ALSO PRODUCER S REPORT 
IF CAS MOVED AND USED 
BY PRODUCER 



SUBMIT TO 



ARM 36 22 307 
ARM 36 22 1243 



» 



BOARD OF OIL AND GAS CONSERVATION 

OF THE STATE OF MONTANA 

1625 ELEVENTH AVENUE P.O. BOX 201601 HELENA, MONTANA 59620-1601 



MONTHLY GAS REPORT 

ALL NATURAL AND CASINGHEAD GAS MUST BE REPORTED BY PURCHASER 

(Acquisition and Disposition) 



Field or Pool . 
Report of 



.County 



Month of 



(Name of Initial Taker) 



AcJdress - 



Title 



Signature 



Report all Volumes in MCF at 14.73 lbs. and 60 °F 



(ADD SHEETS IF NECESSARY) 



ACQUISITION 



(ADD SHEETS IF NECESSARY) 



NAME OF PRODUCER 


Lease, or 
Meter Station 


Number 
Wells 


Oil or 
Gas Wells 


LOCATION 


TAKE 




Sec. 


Twp. 


Rge. 


(MCF) 


















OIL WELL GAS PURCHASED 
















GAS WELL GAS PURCHASED 
















TOTAL 



















DISPOSITION 




USED FOR 


NAME OF COMPANY AND ADDRESS 


VOLUME 


Fuel System 






Lease Use 






Gas Lift 






Transmission System 






Other Disposition (Detail) 






TOTAL 





(FOLLOW INSTRUCTIONS ON REVERSE SIDE) 



Report the volume of gas taken from each gas well separately. Report the 
volume of gas taken from oil wells by meter station. All volumes shall be reported in 
MCF at 14.73 lbs. pressure. 

INSTRUCTIONS 

The addresses, as required on this report, shall be clear and definite as to Street 
Number, City and State. 

Where gas is taken from an oil and/or gas well by the producer into a fuel or other 
gas system and used outside the basic lease said producer is required to make this 
report. In case gas is taken at the well by any person other than the producer then 
such person is required to make this report. 

This report shall be filed on or before the last day of each calendar month and 
shall be complete as to data covering the calendar month next preceding the date 
of filing. It shall be filed with the Board of Oil and Gas Conservation at Helena. 

Report the volume of gas taken from each gas well separately. Report the 
volumeof gas taken from oil wells by meter station. Ail volumes shall be reported in 
MCF at 14.73 lbs. pressure. 

If any space does not apply fill in the word "NONE." 

Make a separate report for each field or pool. 

Please use typewriter if possible. 



FORM NO 10 R7/99 

(Sheet 1) 



SUBMIT TO 



ARM 36 22 307 
ARM 36 22.1243 



I 



Repoti of: 
Address: . 



BOARD OF OIL AND GAS CONSERVATION 

OF THE STATE OF MONTANA 

1625 ELEVENTH AVENUE P.O. BOX 201601 HELENA, MONTANA 59620-1601 

GASOLINE OR OTHER EXTRACTION PLANT 

ALL NATURAL AND CASINGHEAD GAS MUST BE REPORTED BY PURCHASER 

Month of: . — 



Report All Volumes in MCF at 14.73 PSIA at 60° Fahrenheit 



INTAKE VOLUME 



TOTAL GAS FROM OIL WELLS 
TOTAL GAS FROM GAS WELLS . 
TOTAL GAS FROM OTHER SOURCES 



(Details on Sheet 2) 
(Details on Sheet 2) 
(Details on Sheet 2) 



VOLUME MCF 



TOTAL 



Disposition of Residue 



Plant Fuel 

Returned for Lease Fuel 

Sold or Other Disposition (Detail Below) 

Returned to Earth 

Vented 

Shrinkage 



» 



VOLUME MCF 



TOTAL 



Detail of Sale or Other Disposition of Residue 



NAME OF PURCHASER OR USER 


ADDRESS 


USED FOR 


MCF. 










TOTAL 







Plant Production, Receipts, Deliveries and Stock in Barrels of 42 U. S. Gallons 




PRODUCT 


OPENING STOCK 


RECEIPTS 


PRODUCTION 


DELIVERIES 


CLOSING STOCK 


Oil 

Condensate 

Gasoline 

Butane 

Propane 

Kerosene 

Other 












TOTAL 













REMARKS: 



I hereby certify that this report is true and complete to the best of my knowledge. 

Name of Operator 



(Signature) 
(FOLLOW INSTRUCTIONS ON REVERSE SIDE) 



(Title) 



GASOLINE OR OTHER EXTRACTION PLANT MONTHLY REPORT 

Each operator of a gasoline plant, cycling plant or any other plant at 
which gasoline, butane, propane, kerosene, oil, or other liquid products are 
extracted from gas within the State of Montana, shall furnish for each 
calendar month a Gasoline or other Extraction Plant Monthly Report, Form 
10, containing the information indicated by such form respecting gas and 
products involved in the operation of such plant during each month. Each 
purchaser of gas shall report monthly the source or sources and amount 
from each source of gas injected into natural gas storage reservoir 
together with the gross amount of gas which is withdrawn during the month 
from natural storage. Such report for each month shall be filed on or before 
the 20th day of the next succeeding month. 

INSTRUCTIONS 

The addresses, as required on this report, shall be clear and definite as 
to Street Number, City and State. 

This report, including Sheet 2, shall be made by each Operator of a 
Gasoline Plant, Cycling Plant, or any other plant, at which gasoline, 
butane, propane, condensate, kerosene, oil or other liquid products are 
extracted from natural gas. 

This report including Sheet, 2, shall be filed with the Helena office on 
or before the 20th day of each calendar month and shall be complete as 
to data required by such forms covering the calendar month next 
preceding the date of filing. 

Note: Under "Remarks" show the name of the transporter and the 
quantity delivered to each, except deliveries to trucks which may be 
reported in total only. 

In the preparation of Sheet 2 of this report, group and report by unit 
the volumes of "Gas from Oil Wells" and the total thereof; group and 
report by well the volume of "Gas from Gas Wells" and the total thereof; 
report by each source the volume of "Gas from Other Sources" and the 
total thereof; and report the total intake Volume from All Sources. 

Make a separate report for each plant. 

Please use typewriter if possible. 

If any space does not apply fill in the word "NONE." 



FORM NO 10-AR7/99 



Submit to: 

Board of Oil and Gas Conservation 

1625 Eleventh Avenue. P.O. Box 201601 

Helena. Montana 59620-1601 



THIS IS SHEET 2 



» 



Nanne of Producer 



GASOLINE OR OTHER EXTRACTION PLANT MONTHLY REPORT 



DETAIL OF IN TAK E VOLUM E 

County 



» 



• 



Lease Name 



Location 



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Kind of 
Wells 



No. 
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FORM NO 13R7/99 



(SUBMIT IN TRIPLICATE) 



ARM 36.22.307 
ARM 36 22 1244 



TO 



BOARD OF OIL AND GAS CONSERVATION 

OF THE STATE OF MONTANA 

1625 ELEVENTH AVENUE P.O. BOX 201601 HELENA, MONTANA 59620-1601 

PRODUCERS CERTIFICATE OF COMPLIANCE AND AUTHORIZATION 
TO TRANSPORT OIL OR GAS FROM LEASE 



Lease - 



(Sec.) 



.(Twp.). 



Producer. 



Address all correspondence concerning this form to . 
Street City 



The above named producer hereby authorizes . 
Whose principal place of business 



(Street) 



And whose field address is 



Field 



(Rge.)- 



- County. 



State. 



Zip. 



(Name of Transporter) 



(City) 



(State) 



(Zip) 



To transport . 



9 



other transporters transporting oil or gas from this lease are: 



% of the oil or gas produced from the lease designated above until further notice. 



(Name of Transporter) 



(Name of Transporter) 



The undersigned certifies that the rules and regulations of the Montana Board of Oil and Gas Conservation have been complied with except as noted below 
and that the transporter(s) authonzed to transport the percentage of oil or gas produced from the above described property and that this authorization will be valid 
until further notice to the transporter named herein or until canceled by the 



Executed this . 



. day of - 



Approved . 
By 



(Company or Operator) 



Tille 



(Agent) 



(Title) 



-REMARKS OR SPECIAL INSTRUCTIONS- 



(FOLLOW INSTRUCTIONS ON REVERSE SIDE) 



INSTRUCTIONS 

This certificate shall be executed and filed in triplicate with the Board covering each lease from 
which oil or gas is produced. A separate certificate shall be filed for each transporter authorized to 
transport oil or gas from a lease. 

After said certificate has been approved, one copy shall be forwarded to the transporter; one copy 
returned to the producer, and one copy retained by the Board. 

A new certificate shall be filed to cover each change in operating ownership and each change in the 
transporter, except that in the case of a temporary change in the transporter involving less than the 
allowable production for one month, if an allowable is set, the producer shall, in lieu of filing a new 
certificate, notify the Board, and the transporter authorized by certificate on file with said Board, by 
letter of the estimated amount of oil or gas to be moved by the transporter temporarily moving oil or 
gas from lease and the name of such temporary transporter and a copy of such notice shall also be 
furnished such temporary transporter. Such temporary transporter shall not move any more oil or gas 
than the estimated amount shown in said notice. 

This certificate when properly executed and approved by the Board shall constitute an 
authorization to a pipe line or other carrier to transport oil or gas from the lease named therein and 
shall remain in full force and effect until — 

(A) Operating ownership changes, or 

(B) The transporter is changed, or 

(C) The authorization is canceled. 

If any of the rules and regulations of the Board have not been complied with at the time this report 
is filed, explain fully under the heading "Remarks" 

In all cases where this certificate is filed to cover a change in operating ownership or a change in 
the transporter designated to move oil or gas, show under "Remarks" the previous owner or operator 
and the transporter previously authorized to transport oil or gas. 

A separate report shall be filed to cover each producing lease as designated by the Board. 



• 



FORM NO 14 RI0 1 
(Paga 1 of 2) 



SUBMIT TO 

BOARD OF OIL AND GAS CONSERVATION 

OF THE STATE OF MONTANA 

2535 ST JOHNS AVENUE 
BILLINGS, MONTANA 59102 

BOND 



ARM 36 22 307 
ARM 36 22 1308 
ARM 36.22 1408 



KNOW ALL PEOPLE BY THESE PRESENTS, That we, 



Name and mailing address 



as Principal, are 



held and firmly bound unto the State of Montana, in the amount of 

($ ). The condition of this obligation is that the principal proposes to drill or acquire a well or wells for oil. gas. under- 

ground injection, or stratigraphic purposes in and upon land situated within the State of Montana. 





Blanket Bond 


To cover all wells drilled or acquired in the State of Montana. 




Limited Bond 


To cover all wells drilled or acquired limited to the following 




Individual Well Bond 


To cover the following described well: 




UIC Bond 


To cover salt water disposal wells or underground injection wells 




Replacement Bond 


To supercede and assume all wells covered by the following descnbed bond 



NOW THEREFORE, the principal shall comply with all of the provisions of the laws of the State of Montana and the rules, regulations, and orders of the 
Board of Oil and Gas Conservation of the State of Montana especially with reference to the proper plugging of said well or wells, and restoration of the 
surface of the location of said well or wells, and filing with the Board of Oil and Gas Consen/ation of the State of Montana all notices and records 
required by the Board. This bond will be released, upon request, after all liabilities are properly removed from the bond. 



Date 



Principal . 



Signed 



PnnI name and liUe 

l( iho principal is a corpof alion. Ihe bond should bo execulod by its duly aulhorized officers, with l^e seal o( Ihe coiporation affixed When pnncipal or surety executes this bond by agent, power of attorney 
or other evidence of aulhonty must accompany the bond 



Approved Date 



By 



Board of Oil 4 Gas Conservabon 



State Code 



FORM NO. 14 R7/99 
(Page 2 of 2) 



ASSIGNMENT AGREEMENT 



The principal, 



hereby assigns to the 



Board of Oil and Gas Conservation of the Slate of Montana, all rights, interest, and title to the joint-ownership Certificate of Deposit described below, which 
shall entitle the Board to negotiate the Certificate of Deposit or any portion thereof, in the event the Certificate of Deposit is delivered to the Board by the 

of _^_ 

Bank Name Mailing Address ' 

pursuant to a written demand for delivery of the Certificate of Deposit from the Board of Oil and Gas Conservation when the Board requires the proceeds of 
the Certificate of Deposit or any portion thereof under the principal's performance bond. This assignment to the Board shall remain in effect until revoked in 
writing by the Board. The interest earned by the joint-ownership Certificate of Deposit shall accrue to the owner above n,-„Tied. 

Certificate of Deposit Number _^ jn the 

amount of __^_ ( ). 

In witness whereof, the parties have hereunto set their hands and seals this day 

of 



Principal 



STATE OF 



County of . 



On this. 



personnally appeared . 



. day of _ 



, before me, a Notary Public for the State of. 



and ■ 

Who executed the foregoing assignment and acknowledged to me that they executed the assignment. 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal the day and year written above. 



Notaiy Public for the Stale of 



Residing at . 



My commission expires 



(NOTARIAL SEAL) 

Receipt of a true copy of this assignment agreement is acknowledged this 



day 



Of- 



Month Year 

to deliver the proceeds of said certificate to any person by the Board of Oil and Gas Conservation 



This bank agrees to hold the Certificate of Deposit described above in safe keeping until directed 



Name of Bank 



By- 



Signature 



FORM NO 18 R7/99 SUBMIT TO ARM 36 22 307 

ARM 36.22.1308 

BOARD OF OIL AND GAS CONSERVATION 
OF THE STATE OF MONTANA 
2535 ST. JOHNS AVENUE BILLINGS, MONTANA 59102 

DOMESTIC WELL BOND AND LIEN 

Bond No. 



KNOW ALL MEN BY THESE PRESENTS, That, we, . 



(Name and Mailing Address) 



of the County of in the State of 

hereby assign to the State of Montana the hereinafter described real property in the County of 
State of Montana: 



as security for the payment to the State of Montana of the sum of $ DOLLARS. The condition of the 

obligation is that the principal proposes to acquire the above described non-commercial wells in the State of Montana. 

NOW, THEREFORE, if the above principal shall comply with all of the provisions of the laws of the State of Montana and 
the rules, regulations and orders of the Board of Oil and Gas Conservation of the State of Montana, especially with reference to 
the proper plugging of said wells and filing with the Board of Oil and Gas Conservation of the State of Montana all notices and 
records required by said Board, then this obligation is void; otherwise, the same shall be and remain in full force and effect. 

WITNESS our hands and seals, this day of , 



Pnncipal 

(If the principal is a corporation, the bond should be executed by its duly authorized officers, with the seal of the corporation affixed. 
When principal executes this bond by agent, power of attorney or other evidence of authority must accompany the bond.) 

FILED FOR RECORD THIS DAY OF 



at o'clock M, and recorded in Book of on Page of the County 

of .State of Montana. 



APPROVED — , 

BOARD OF OIL AND GAS CONSERVATION 
OF THE STATE OF MONTANA 

By; .. 



Clerk and Recorder 
By: _ 



Name Title 

NOTE THIS BOND A.ND LIEN MUST BE RECORDED PRIOR TO APPROVAL BY THE BOARD IF THE WELLS ARE LOCATED IN MORE THAN ONE COUNTY, THIS BONO AND LIEN MUST BE 
RECORDED IN EACH OF SAID COUNTIES 



STATE OF MONTANA > 

I ss. 
County of 

On this day of in the year 

before me a Notary Public 

for the State of Montana, personally appeared 



known to me 

(or proved to me on oath of . 



to be the person whose name subscribed to the within instrument and acknowledged to me 

that he executed the same. 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal the day and year first above written. 



Notary Public for the State of Montana. 

Residing at 

My Commission expires 



FORM NO 19R7/99 



BOARD OF OIL AND GAS CONSERVATION 
OF THE STATE OF MONTANA 
2535 ST. JOHNS AVENUE BILLINGS, MONTANA 59102 

RELEASE AGREEMENT 



ARM 36 22 307 
ARM 36 22 502 
ARM 36 22.1305 



KNOW ALL MEN BY THESE PRESENTS, that t, 



of the County of 



in the State of Montana, am the owner of the hereinafter described land upon which a well for oil, gas, or seismic 
exploration was drilled, to-wit: 

Operator 



Address . 



Lease Name . 

Weil No. . 

Located 



-Sec. 



,Twp. 



Rge. 



ft. from (N S) line and 



ft. from (E W) line, 



The surface elevation is 



That, in accordance with Board Rules 36.22.1305, or 36.22.502(5), 

i do hereby notify the Board of Oil and Gas Conservation of the State of Montana of my desire to utilize said well as a fresh 

• water well; and, that if such utilization is approved, I do hereby release and discharge the operator hereinabove named from any 
further work or responsibility in relation to the plugging of said well. 



Water Use: 

Producing Depth 
Yield of well 



Domestic 
Industrial - 



WITNESS my hand this. 



Municipal 
Drainage 



Stock 



-Other. 



Irrigation . 



Producing Formation 



Annual Withdrawal 
day of 



Landowner Signature 



Address . 



IN THE PRESENCE OF: 



Address 
Address 



APPROVED BY 

MONTANA BOARD OF OIL AND GAS CONSERVATION 



Narne/Title 
Dated: - 



Return six copies to the address listed above. 
(SEE REVERSE SIDE) 



Board Rule 36.22.502 PLUGGING AND ABANDONMENT ' 

(5) A seismic shot hole may be left unplugged at the request of the surface owner for conversion to a fresh water well provided the 
surface owner executes a release on Form No. 19 relieving the party otherwise responsible for the plugging and abandonment of 
the hole from any liability for damages that may thereafter result from the hole remaining unplugged. This release will cite the date, 
location, surface elevation, depth to aquifer, and any action taken. This information shall be furnished by the geophysical operator. 
The surface owner must also notify and file within 30 days appropriate forms with the water rights bureau of the department of natural 
resources and conservation. The surface owner must also apply for a permit from the board of water well contractors, and explain 
in detail the procedures to be used in constructing the well. This is to insure that the shot hole is properly constructed, cased and 
developed into a water well, according to the minimum construction standards for water wells, as adopted by the board of water well 
contractors. 

Board Rule 36.22.1305 EXCEPTION FOR FRESH WATER WELLS 

(1) When the well to be plugged, as required by ARM 36.22.1303, may safely be used as a fresh water well and such utilization 
is desired by the landowner, the well need not be filled above the required sealing plug set below fresh water; provided that 
written notification of such utilization and a release by use of Form No. 19 is secured from the landowner and filed with the 
board. 

(2) Approval by the petroleum engineer or his authorized agent of the work done shall relieve the operator of further responsibility. 

APPLICATION FOR WATER RIGHTS 

Complete applicable Form No. 600 or 602 following well completion and submit with electric log ( if run) showing the pertinent sand, 
to the Water Rights Bureau, P.O. Box 201601, Helena, Montana 59620-1601. 



• 



FORM NO 20 R7/99 Submit In Quadruplicate To: 

MONTANA BOARD OF OIL AND GAS CONSERVATION 
2535 ST. JOHNS AVENUE BILLINGS, MONTANA 59102 

Notice of Intent to Change Operator 

The undersigned Transferor hereby notifies the Board of Oil and Gas Conservation of 
its intention to transfer ownership and/or operation of the following wells to the undersigned Transferee: 



ARM 36.22.307 
ARM 36.22 1308 



Lease Name: 



County: 



Lease type:(Private, State, Federal, Indian) 



Field name: 



Description of wells: (Include official well name and number as reflected on Board of Oil and Gas Conservation records, 
API well number, and exact location of the well including quarter-quarter section, footage measurements, Section, 
Township, and Range.) 



» 



Transferor's Statement: 
I hereby designate the Transferee named herein as the 
owner and/or operator of record of the above described 
well(s). 1 acknowledge that the Transferor continues to be 
responsible for said well(s) and all associated equipment 
and facilities until such time as this transfer is approved by 
the Montana Board of Oil and Gas Conservation. I certify that 
the information contained herein is true and correct: 



Company 



Street Address 
P.O. Box 



City, State, ZIP 
Signed 



Print Name 
Title 



Telephone ( 



Transferee's Statement: 
I hereby accept the designation of operator/owner for the atxjve 
described well(s). I understand that this transfer will not be 
approved until the Transferee has complied with the Board's 
t)onding requirements. 1 acknowledge that under Section 82-11- 
101 MCA, the Transferee herein is responsible for the costs of 
proper plugging and restoration of the surface of the well(s) 
described above. I certify that the information contained herein is 
true and conrect: 



Company 

Street Address. 
P.O. Box 



City, State, ZIP 
Signed 



Print Name . 
Title 



Telephone ( 



BOARD USE ONLY 



Approved 



Dale 



Name 



Title 



Oper. No. 



Bond No. 



Field Office Review 

Inspection 
Records Review 
Operations 



Date 



Initial 



Oper. No. 



Bond No. 



Instructions for Form 20 

This form is used to change the Operator of Record for one or more wells. 

To transfer 1 well , complete the front portion of this form as indicated 

To transfer more than 1 well , please type: "See attached list" in the Description of Wells area. The attached list of 
wells should be separated by lease and sorted by Township. Range, and Section . Wells should be identified as F)ederal/ 
Indian, or P)rivate/State under lease type. injection/SWD wells should be identified as such. Plugged and Abandoned 
weils should not be included for transfer. The list should be in the following format: 

Lease Name Twp. Rge. Sec. QtrQtr Footage Well name/number LeaseType API Number 

The form must be signed by both the current owner/operator (transferor) and the proposed new owner/operator 
(transferee). The current operator of record will continue to be fully responsible for any wells and associated equipment 
or facilities until the transfer is approved by an authorized agent of the Montana Board of Oil and Gas Conservation. Until 
the transfer is approved, all reports of production, well work, or other required reports must bt filed in the name of the 
current operator of record. For large change of operator submissions, please include a diskette containing the 
data list (if possible). 

The Montana Board of Oil and Gas Conservation may withhold approval of the transfer until the well(s) made the subject 
of this form is (are) in substantial compliance with all applicable Board laws and rules. All production reports, notices, 
forms, logs, samples, or other information required by Board law, rule, or order must be on file with the Board. The 
transferee must be in compliance with the Board's bonding requirements, as provided in Rules 36.22.1308 and 1408 
ARM, before the transfer can be approved. A copy of the approved or disapproved Form 20 will be returned to each party. 
The Board may withhold approval of this transfer until all of the transferee's current wells and operations, if any, are in 
substantial compliance with Montana laws and Board rules. 

Parties transferring wells are advised that the identity of responsible persons as defined by Section 82-1 1-101, MCA, will 
be determined by the Board's records. 

If this form relates to a proposed change in the operator of record for a State of Montana oil and gas lease issued by the 
Montana Board of Land Commissioners, the parties should send a separate copy of this form to the Montana Department 
of Natural Resources and Conservation, Trust Lands Management Division, Minerals Management Bureau, 1625 
Eleventh Avenue, P.O. Box 201601, Helena Montana 59620-1601 

The proposed new operator should have a current copy of the rules and laws of the Montana Board of Oil and Gas 
Conservation. Copies of the rules and laws may be obtained from any Board office, or are available on the Internet at 
http://www.bogc.dnrc.state.mt.us 

NOTICE: False or inaccurate information can void the transfer of a well or wells to another operator's bond. Be 
sure to verify the accuracy of all well descriptions and other information supplied with this form. 



BOARD USE ONLY 



CONDITIONS OF APPROVAL 



FORM NO 22 R7/99 



SUBMIT IN QUADRUPLICATE TO: 



ARM 36.22.307 
ARM 36 22.601 



MONTANA BOARD OF OIL AND GAS CONSERVATION 
2535 ST. JOHNS AVENUE, BILLINGS, MONTANA 59102 



Application for Permit 



To: 



Drill n Deepen O Re-enter LJ 

OilD GasD Other D 



Operator: 

Address 

City 

Telephone Number 



State 



ZIP 



Surface Location of Well (quarter-quarter section and footage measurements) 



(if directionatly drilled, show both surface and bottom hole locations above) 



Proposed total depth 



Formation at total depth 



Lease Name: 



Lease Type (Private/State/Federal): 



Well Number: 



Unit Agreement Name: 



Field Name or Wildcat: 



Objective Formation(s): 



Section, Township, and Range: 



County: 



Elevation (indicate GL or KB) 



Size and description of drilling/spacing unit API number of another well on this lease (if any) Anticipated spud date 



Hole size 



Casing size 



Weight/foot 



Grade (API) 



Depth 



Sacks of Cement 



Type of Cement 



» 



Describe Proposed Operations; 

Describe or attach labeled diagram of blowout preventer equipment. Indicate if air drilled or describe mud program. 



BOARD USE ONLY 



Approved(date) 
By 



Title - 



Permit Fee 

Check Number - 
Permit Expires - 
Pemnit Number - 



i 



THIS PERMfT IS SUBJECT TO THE 
CONDmONS OF APPROVAL 
STATED ON THE BACK 



API Number 25- 



The undersigned hereby certifies that the information 
contained on this application is true and correct; 



Signed (Agent) - 



Title 



Date 



Samples Required; 



NONE 



ALL 



FROM_ 



feet to . 



feet 



Core chips to address below, full cores to USGS, Core Laboratory Arvada CO Required samples must be washed, dried and delivered prepaid to: 

Montana Board of Oil and Gas Conservation 
2525 St. Johns Avenue 
Billings, MT 59102 



SUPPLEMENTAL INFORMATION 



Note: Additional information or attachments may be required by Rule or by special request. 

1 . Attach a survey plat certified by a registered surveyor. The survey plat must show the location of the well with 
reference to the nearest lines of an established public survey. 

2. Attach an 8\x 11" photocopy of that portion of a topographic map showing the well location, the access route 
from county or other established roads, residences, and water wells within a\ mile radius of the well. 

3. Attach a sketch of the well site showing the dimensions and orientation of the site, the size and location of pits, topsoil 
stockpile, and the estimated cut /fill at the corners and centerstake. (Note: the diagram need not be done by an 
engineeror surveyor.) Attach a sketch of a top view and two side views of the reserve pit(s), if utilized. The reserve 
pit sketch must show the length, width, depth, cut and fill, amount of freeboard, area of topsoil stockpile, and the 
height and width of berms. 

4. Describe the type and amount of material or liner, if any, to be used to seal the reserve pit. If a synthetic liner is used, 
indicate the liner thickness (mils), bursting strength, tensile strength, tear strength, puncture resistance, hydrostatic 
resistance, or attach the manufacturer's specifications. 

5. Describe the proposed plan for the treatment and/or disposal of reserve pit fluids and solids after the well is 
drilled. If the operator intends to dispose of or treat the resen/e pit contents off-site, specify the location and the 
method of waste treatment and disposal. (Note: The operator must comply with all applicable federal, state, county, 
and local laws and regulations with regard to the handling, transportation, treatment, and disposal of solid wastes.) 

6. Does construction of the access road or location, or some other aspect of the drilling operation require additional 
federal, state, or local permits or authorizations? If yes, indicate the type of permit or authorization required: 

□ No additional permits needed 

n Stream crossing permit (apply through county conservation district) 

□ Air quality permit (apply through Montana Department of Environmental Quality) 

n Water discharge permit (apply through Montana Department of Environmental Quality) 

D Water use permit (apply through Montana Department of Natural Resources and Conservation) 

□ Solid waste disposal permit (apply through Montana Department of Environmental Quality) 

□ State lands drilling authorization (apply through Montana Department of Natural Resources and Conservation) 

□ Federal drilling permit (specify agency) 

□ Other federal, state, county, or local permit or authorization: (specify type) 



NOTICES: 

1 . Date and time of spudding must be reported to the Board verbally or in writing within 72 hours after the 
commencement of drilling operations. 

2. The operator must give notice of drilling operations to the surface owner as required by Section 82-10-503, MCA, 
before the commencement of any surface activity. 



BOARD USE ONLY 



CONDITIONS OF APPROVAL 



The operator must comply with the following condition(s) of approval: 



WARNING: Failure to comply with conditions of approval may void this permit. 



FORM NO. 23 RIO/00 Submit In triplicate to: arm 36.22.307 

36.22.1227 

MONTANA BOARD OF OIL AND GAS CONSERVATION 

2535ST. JOHNS AVENUE 
, BILLINGS, MONTANA 59102 

(406) 656-0040 

Application For Permit To Construct Or Operate An Earthen Pit Or Pond 

(Production Facility Only) 


New pit Existing pit 


Lease Name: 


Operator 

Address 

City State Zip Code 

Telephone Number ( ) Telefax Number ( ) 


Lease Type (Private/State/Federal); 


Unit Name: 


Field or Area: 


County: 


Location of Pit - 

1/4 1/4 Section, Township, and Range: 



Describe the purpose of the earthen pit or pond (if temporary, indicate anticipated time pit will be in use): 



» 



Number and type of wells using this pit; 



.Oil 



Gas. 



Injection 



.Other (specify) 



Average water inflow: 



bbls./day 



Maximum pit volume: 



bbls. 



Describe type and origin of fluids, name and location of source wells, producing formations, and approximate fluid volume 
contributed by each well: 



Provide a copy of full water analysis with application for new pits only. Board may require a water analysis for existing pits. 

The water analysis must include the date and source of sample (treater, wellhead, pit, etc.), and the name, address, and 
telephone numbers of laboratories. Standard methods must be used for all collection and testing of samples. 



BOARD USE ONLY 



Approved (Dale) . 
lBy..__ 

Title 



Permit Expires . 



CONDITIONS OF APPROVAL 
ON REVERSE, 



Signed (Agent) _ 



Typed name and Title . 



Date 



SUPPLEMENTAL INFORMATION 



Attach the following information to this permit application; 

FOR NEW PITS: Attach diagrams of a top view and two side views of the pit or pond. The diagrams must show the 
length, width, depth, cut and fill, maximum fluid level, area of topsoil stockpile, and the height and width of berms. 
identify the location of additional items such as fences, liners, monitoring wells, tanks, lines, siphons, or other 
equipment if used. Diagrams need not be prepared by an engineer or surveyor. 

FOR EXISTING PITS: Attach color 3" x 5" (or larger) photographs of existing pit or pond. Indicate the date photographs 
were taken and name and address of the photographer. All photographs must accurately portray the size and condition 
of the earthen pit or pond at the time this application is submitted. 



Describe the type and amount of material or liner used, if any, to seal the pit or pond. If a synthetic liner is used, indicate 
the liner thickness (mils), bursting strength, tensile strength, tear strength, puncture resistance, hydrostatic resistance, 
or attach the manufacturer's specification sheet to this application. 



Describe the proposed method of treatment and/or disposal of the liquid and solid contents upon abandonment of the 
pit or pond: 



NOTE: The Operator must comply with all applicable federal, state, county, and local laws and regulations conceming 
the handling, treatment, and disposal of wastes. 



This pit or pond was previously permitted by (operator(s)) on the 

day of , . Attach a copy(ies) of the previous pennit(s). 



BOARD USE ONLY 



CONDITIONS OF APPROVAL 



The operator must comply with the following condition{s): 



Failure to comply with conditions of approval may void this permit. 



FORM NO. 24 New 8/00 ARM 36.22.1308 

36.22.1408 

IRREVOCABLE STANDBY LETTER OF CREDIT 

BENEFICIARY: MONTANA BOARD OF OIL &GAS CONSERVATION 

2535 St. Johns Avenue Billings. MT 59102 Ph (406) 656-0040 

OPERATOR: Contact: 

Address Phone: 

City/ST/ZIP 

To: Montana Board of Oil & Gas Conservation, 

We hereby establish our Irrevocable Standby Letter of Credit No in your favor, at the request 

and for the account of the above mentioned operator up to the aggregate amount of 

US dollars, available upon presentation of this letter of credit, a draft, and a Board Order issued by the Montana 
Board of Oil & Gas Conservation, ordering payment of said funds. The format of said Board Order is on the back 
of this form as Exhibit A. 

This letter of credit is effective as of (date) and shall expire on (date at least 1 year later) 

Such expiration date shall be automatically extended for a period of (at least 1 year) 

on (date) , and each successive expiration date, unless, at least 120 



B days before the current expiration date, we notify both you and the operator by certified mail that we have decided 
not to extend this letter of credit beyond the current expiration date. In the event you are so notified, any unused 
portion of the credit shall be available upon presentation of your Board Order, this letter of credit and a draft by the 

applicable expiration date. All drafts must be marked: "Drawn under (bank) 

Irrevocable Standby Letter of Credit Number , Dated 

Whenever this letter of credit is drawn on under and in compliance with the terms of this credit, we shall duly 
honor such Board Order, and issue a check made payable to the Montana Board of Oil and Gas Conservation 
in accordance with your instructions. 

Except as otherwise expressly stated herein, this Letter of Credit is subject to all applicable provisions of Uniform Customs and Practices for Documentary 
Credits. 1993 Revision, International Chamber of Commerce, Publication No. 500. 

FINANCIAL INSTITUTION 

ADDRESS by 



CITY/ST/ZIP Title . 

PHONE Date 



Exhibit A 



Financial Institution: 

Irrevocable Standby Letter of Credit Number: Date: 



Before the Board of Oil & Gas Conservation 
of the State of Montana 

In the Matter of: Board Order Number 



The Board of Oil and Gas Conversation of the State of Montana hereby orders the forfeiture of the bond 

for . A check in the amount 

of US dollars shall be made payable and sent to: 

Montana Board of Oil and Gas Conservation 

2535 Saint Johns Avenue 

Billings, MT 59102 

I 

Done and performed by the Board of Oil and Gas Conservation of the State of Montana this 

day of , . 



By:, 
its: 

By: 

Its: 

By: 
Its:. 



ARM 36 22 307 
ARM 36.22 601 
ARM 36 22.604 



• 



FORMAT FOR ADVERTISING AN APPLICATION FOR PERMIT TO DRILL AN OIL AND GAS WELL 

REQUIRED BY ARM 36.22.601 

BEFORE THE BOARD OF OIL AND GAS CONSERVATION 
OF THE STATE OF MONTANA 

In the Matter of the application of ) NOTICE OF 

) INTENTION TO APPLY 

/KiAt.iT ^ir Anni i/^AM-rx N FOR PERMIT TO 

(NAME OF APPLICANT) DRILL AN OIL AND GAS 

for a Permit to Drill an oil and ) WELL 

gas well. ) 



1. Name and address of Applicant: 



2. Legal Descnption and Approximate Footages of Surface 
Location of Proposed Oil and Gas Well: 



3. Total Depth Proposed to be Drilled: 



Notice is hereby given that an application for permit to drill an oil and gas well at the surface location set forth above to the depth as 
stated will be filed with the Montana Board of Oil and Gas Conservation. Pursuant to Rules 36.22,601 and 36.22.604, Administrative 
Rules of Montana, an interested party may demand an opportunity to be heard by the Montana Board of Oil and Gas Conservation 
concerning the application. SUCH DEMAND FOR HEARING MUST BE RECEIVED BY THE MONTANA BOARD OF OIL AND GAS 
CONSERVATION AT THE ADDRESS SET FORTH BELOW NO LATER THAN TEN (10) DAYS AFTER THE DATE OF 
PUBLICATION OF THIS NOTICE, OR THE APPLICATION WILL BE ACTED UPON BY THE BOARD'S PETROLEUM ENGINEER 
WITHOUT HEARING. A DEMAND MUST: (1) SET FORTH THE NAME, ADDRESS AND TELEPHONE NUMBER OF EACH 
INTERESTED PARTY, THEIR OWNERSHIP INTEREST IN THE L^NDS SURROUNDING THE PROPOSED WELL, AND THE 
REASONS WHY A HEARING IS SOUGHT; (2) BE SERVED UPON THE APPLICANT BY COPY MAILED OR FAX TRANSMITTED 
TO THE ADDRESS SET FORTH ABOVE. 

MONTANA BOARD OF OIL AND GAS CONSERVATION 

2535 ST. JOHNS AVENUE 

BILLINGS, MONTANA 59102 

FAX NUMBER: (406) 657-1604 



m